Mar 13, 2007 7:36 pm US/Eastern
Allstate Plans To Reduce Rates
Company asking for 14% rate reduction
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TALLAHASSEE (CBS4) ―
The "good hands people" at Allstate plan to drop hurricane insurance rates by more than 14 percent on average statewide later this summer, if state regulators approve.
The Office of Insurance Regulation said that Allstate Floridian Insurance Co. and Allstate Floridian Indemnity Co. had filed for rate decreases averaging 14.2 percent that would go into effect when customers renew their policies after June 1.
Regulators will review the filing, but Allstate can begin charging the lower rates before receiving an answer.
The filing is one of the first by a major Florida insurer since the Legislature passed a bill in January aiming to drop premiums, partly by giving insurance companies more access to cheaper backup coverage through the state's Hurricane Catastrophe Fund.
State regulators earlier this year put out figures for how much rates should drop, in general, because of the new law. Statewide, homeowners with private insurance are expected to see cuts of about 24 percent on average because of the law.
That makes Allstate's proposal, filed Friday, "obviously on the lower side of the averages that we published, but we did say those were averages," said OIR spokesman Bob Lotane.
Lotane said regulators had not begun to review the filing -- and noted that even if approved the company will have to make adjustments later this summer after buying reinsurance. That could lower the company's rates more, Lotane said, although it may not.
Gov. Charlie Crist, who pushed the Legislature to pass a bill that will result in lower insurance premiums, said that a 14 percent drop is far better than what customers are getting now.
"When was that ever heard of? When does that ever happen in the history of our state?" asked Crist. "It's a new day, and it may not be 20 percent, or 15 percent, but a 14 percent reduction?"
The Legislature was forced into action by the rumblings of homeowners from around the state, who have seen rates for insuring their home more than double in many cases since the hurricanes of 2004 and 2005. Last year, Allstate was before regulators asking for rate increases of more than 20 percent for many homeowners.
Crist said more and more companies are starting to file for lower rates.
"We had two companies come to us with an over 20 percent reduction," he said. "We have a new insurance company that met with some of the people on our staff last week, wants to bring in $100 million worth of coverage to Florida. That would not have happened before the Legislature did the great work that they did."
(© 2007 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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