TALLAHASSEE, Fla. (AP) -- Homeowner insurance rates are finally coming down in Florida nearly a decade after the last hurricane hit, the state's insurance commissioner says.
But the upbeat report by Insurance Commissioner Kevin McCarty also shows that some of the state's larger insurers have asked for — and received — rate hikes. The report also did not include the state-created Citizens Property Insurance, which has been steadily raising its rates for several years.
The report was done at the urging of Chief Financial Officer Jeff Atwater, who wanted to know why homeowner rates have not come down even though the largest expense for insurance companies — reinsurance — has been coming down.
A national report released in December found that Floridians are paying the highest homeowner insurance rates in the nation. The report from the National Association of Insurance Commissioners concluded that the average premium for most Florida homeowners is $1,933 a year, or nearly twice the national average of $978.
McCarty's report said that the overall trends show rates going down and that the market is "more robust and competitive" than it has been previously. Florida's insurance market has been volatile ever since Hurricane Andrew tore into the state in 1992 and rates skyrocketed after eight hurricanes hit the state in 2004 and 2005.
"There is reason to be optimistic that the Florida homeowners market is steadily improving," McCarty wrote.
McCarty's report is based on 2011 rates and is only partially complete: Data was provided by only half of 30 insurance companies that represent 70 percent of the insurance market. However, among the 15 insurers providing data, six had filed for rate decreases ranging from 2.4 percent to 9.2 percent.
However, two of the state's larger insurers, State Farm Florida and Castle Key, have either asked for or received approval for rate hikes.
The report also did not include Citizens, which has more than 1 million policyholders and represents about 20 percent of the insurance market. Citizens has been raising rates because it covers homes, including those along the coast, that private insurers have been reluctant to insure. State law caps how much Citizens can raise its rates each year.
The report also said many insurers were seeing declines in their own costs for reinsurance. Reinsurance is the backup coverage an insurer purchases to make sure it can pay claims in the event of a major catastrophe like a hurricane. Rising reinsurance costs has been blamed for past price spikes.
McCarty noted that while reinsurance is a "significant factor" in rates, other types of losses could also impact rates. He also stated that a "10 percent decrease in reinsurance costs does not translate into a 10 percent decrease in total rates."
Atwater said that consumers should anticipate that their insurers will begin to pass on savings.
"The commissioner made it clear, barring any catastrophic event, he has every expectation that these lower reinsurance costs will be reflected in lower rates for consumers in future rate filings," Atwater said. "I share the Commissioners expectations. Floridians deserve rate relief."
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