Sep 30, 2007 9:39 am US/Eastern
Allstate Requests 41% Rate Hike
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MIAMI-DADE (CBS4) ―
Florida's fourth-largest homeowner insurer, Allstate Floridian Insurance Company, according to the
Palm Beach Post is seeking a 41.9 percent rate hike, an increase that would take away any gains from a 14.2 percent rate cut put into effect June 1st if approved.
Allstate says they're taking advantage of the state reinsurance fund but they still need additional costly coverage from the global reinsurance marketplace to ensure it can pay claims in the event of a string of major catastrophic hurricanes.
Terrence Thomas, who has Allstate coverage for his home, says he just can't believe they want to raise the rates again.
"Since I've had my house it's gone up at least 6 times," said Thomas, "it's just terrible. I've been in my house for about 20 years and it's gone up 6 times and I've never even used it. I wish there was something I could do"
Florida Insurance Commissioner Kevin McCarty has been critical of other insurers who have filed for rate increases, charging that some of them have unnecessarily increased their purchase of reinsurance to drive rates up.
Homeowner Tom Jahnes told
CBS4 reporter Joan Murray he really can't get angry at the insurance companies who are just trying to make a buck.
"The more that we restrain them or constrain them from being creative from finding other ways, and creating other ways, to create a portfolio to make money," said Jahnes "the more we can expect these very burdensome increases. So I don't think we need to point our fingers at the insurance companies, we need to point our fingers at the folks in Tallahassee and say create a free market and let the market work."
Allstate's rate increase request follows those of USAA, which wants a 53.9 percent hike and Florida Farm Bureau, which seeks a 30.3 percent increase, as well other insurers seeking rate increases.
The increase cannot go into effect without the permission of the state regulators. State law requires a hearing for any increase over 15 percent.
Allstate Floridian has about 300,000 policies.
((© 2006 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
CBS4 news partner The Miami Herald contributed material for this repo)
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