Top Stories

Top Fla. Insurer To Limit Number Of New Policies

MIAMI (CBS4) ― One of the state's largest property insurers will "significantly restrict" the number of new residential insurance policies it sells in Florida, saying the state's recent legislative action has made it impossible for them to charge adequate rates.

USAA said it will drop 27,000 second-home policies in Florida. The San Antonio-based company is the third-largest residential property insurer in northeast Florida.

USAA said it will write only new policies in Florida for primary residences of active military members required to live in the state.

The company will continue to cover policyholders' primary residences in Florida.

"To call the legislative and regulatory environment in Florida challenging is a gross understatement," USAA spokesman David Snowden said. "The Florida (insurance market) is overregulated. It keeps us from being able to price our policies appropriately."

USAA said it has paid about $220 million more in Florida homeowner insurance losses and expenses than it has collected in premiums in the past decade.

Private insurance industry officials have complained the new legislation, signed in January, artificially suppresses rates and discourages companies from wanting to do business in Florida. They also object to provisions that try to force companies to do business in a hurricane-prone state, such as the measure that requires car insurers to sell homeowners policies.

A spokesman with the Florida Office of Insurance Regulation said changes were necessary to reduce the financial burdens on Florida residents.

"The legislation provided carriers with tools (with) which they could pass along legitimately realized savings," Bob Lotane said. "We believe rates are where they should be ... to reflect the risks that these companies face in Florida."

(© 2007 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)