Commissioner Comments On State Farm’s 52.7 Percent Rate Request

According to the Florida Office of Insurance Regulation State Farm Florida Insurance Company is now requesting a statewide average rate hike of 52.7 percent, an amended rate request that agrees with OIR calculations.

On May 13, 2006 State Farm submitted two rate filings requesting a combined effective rate of 79 percent to OIR. At that time OIR informed State Farm that the rate was unsupported and informed the company of its intention to disapprove the filings.

Subsequently, State Farm withdrew one of the filings and said it would amend the other. State Farm’s 52.7 percent amended rate agrees with the OIR’s evaluation and was confirmed when company data was submitted to the public hurricane model. Insurance Commissioner Kevin McCarty released the following statement regarding this development:

“While this approved rate is sharply less than what had originally been filed it is still substantial, and I am deeply concerned about the effect it will have on the household budgets of Floridians, particularly those with low incomes or on fixed incomes,” McCarty said.

“One of the foremost mandates of my job requires me to approve rate requests that are justified and that will provide the company the ability to pay the claims of Floridians whose homes are damaged or destroyed due to catastrophic storms, and I am confident the rate we are approving is justified under law,” he explained. “But again, I regret the tough economic choices policyholders may have to make to adequately insure their property.”

Source: Florida Department of Insurance Regulation

Topics Florida