Florida Property Insurers Seek Steep Rate Hikes, Citing Water Damage
Pointing to claims for water damage, two property insurance companies Friday asked state regulators to approve average rate increases topping 26 percent.
The Florida Office of Insurance Regulation held hearings on requests by Southern Fidelity Insurance Co. for an average 31.1 percent increase and Capitol Preferred Insurance Co. for an average 26.2 percent increase.
The companies, which are related, have already started moving forward with the increases under what is known as the state’s “use and file” system, but regulators can still reject the increases or require changes.
The proposed increases would affect homeowners and condominium owners and would vary widely depending on factors such as types of policies, locations and ages of homes. But company officials said, for example, that Southern Fidelity customers with homes built in the 1990s could see large increases.
The proposed hikes are not directly related to hurricane damage, with company officials saying the biggest factor driving up costs is claims for water damage related to such things as leaks.
State lawmakers last year passed a measure to restrict a controversial practice known as “assignment of benefits” that insurance companies said was increasing costs of water-damage claims. But Southern Fidelity and Capitol Preferred contend that such claims continue to be expensive because of litigation.