Fla. Approves 8.2% Rate Hike for Allstate

Two Allstate property insurance companies can raise their rates by 8.2 percent, state regulators ruled this week, a move that will affect roughly 400,000 customers.

Allstate Floridian Insurance and Allstate Floridian Indemnity had originally requested average statewide rate increases of 22.5 percent and 33.2 percent, respectively. The state Office of Insurance Regulation said those filings last spring were unacceptable.

The companies later amended their requests to a 19.1 percent rate increase for Allstate Floridian and a 26.4 percent increase for Allstate Indemnity.

“Those filings also weren’t justified,” Bob Lotane, spokesman for the insurance regulation office, said. “In this case, one of the biggest issues was they were asking for money to pay for reinsurance which they had not purchased yet and that’s just not allowed.”

The companies submitted a revised 8 percent rate increase request last week.

Allstate Floridian spokesman Ryan Priest said the rate increases will only serve as a temporary fix.

“It just meets our immediate needs to purchase private reinsurance,” Priest said, noting that this year’s mild hurricane season helped, but only a little.

“There were very few claims in Florida, but, as an example, the 2004 season wiped out 10 years worth of claim-paying capacity,” Priest said. “One season is a relief but it will take many years to restore and rebuild the claims capacity we had prior to 2004.”

The new Allstate rates are effective for new and renewal business as of Feb. 11. Allstate Floridian and Allstate Indemnity last increased their rates by a statewide average of 16.3 percent and 24.4 percent, respectively, in October 2005.