Castle Key, Amica Mutual seek 54% rate increase for Florida home insurance policies

Two Florida property insurers are seeking approval for a 54% average rate increase from the Florida Office of Insurance Regulation (OIR).

Amica Mutual Insurance Company is asking the OIR to approve a 54.1% increase in rates for its dwelling fire policies, which covers about 500 insureds, according to the Insurance Journal. If approved, the rate increase would go into effect in July.

Castle Key Indemnity Company also filed a request to approve a 53.5% increase for its HO-6 policies, which are homeowners insurance policies for condominium units.

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Castle Key, an insurance company owned by the Allstate Insurance Group, already raised the rates of as many as 105,247 HO-6 policyholders last May using the use-and-file approach, which allows insurers to raise their rates before getting approval from regulators.

However, should the Florida OIR find the increase unwarranted, Castle Key could be asked to refund some or all of it, according to the Insurance Journal.

The Florida OIR will hear Castle Key’s rate request at 9 a.m. on Feb. 21.

Owning a condo in Florida is becoming increasingly more expensive

Condo owners are getting hit from two sides as insurance rises in the Sunshine State. Inflation and the rising cost of master condo policies mean higher HOA fees. But it’s not just inflation and insurance driving up costs. A new law stemming from the shocking collapse of the Champlain Towers in Surfside that killed 98 people in 2021 is driving up the condo building maintenance costs.

One of the the new laws, SB 4-D, is a double-edged sword for condo associations, unit owners and insurers, creating new hurdles they must address for the sake of safety.

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It requires buildings three stories or taller to undergo milestone inspections to evaluate their structural integrity and make recommendations for necessary improvements. The bill also requires condo associations to keep reserve funds that could be used to pay for needed maintenance.

The new law doesn’t require that associations have their reserve fund full by the end of the year, but it does require that they are on track to fund the replacement of a component by the time it nears the end of its useful life.

To determine how much money an association needs to retain, they must complete a Structural Integrity Reserve Study by Dec. 31, 2024. The study must be completed every 10 years.

What is a condo association insurance policy?

Sometimes called the master condo policy, a condo association insurance policy covers damage to shared areas of the condo building, such as amenities, elevators and lobbies. It also covers the exterior of the building and liability in those same spaces.

How does it differ from individual condo insurance?

The condo association insurance policy covers the exterior and shared spaces of a condo building. Individual condo insurance policies cover the unit itself, similar to a homeowners insurance policy. This includes personal property, liability if someone is injured inside that particular unit and the like.

This article originally appeared on Pensacola News Journal: Two Florida homeowners insurance companies seek 54% increase