Florida Regulators Reject Allstate’s Bid To Raise Rates
In welcome news to Florida homeowners, state regulators denied Allstate Insurance in their bid to raise property insurance rates by as much as 43% statewide.
When the company filed for the rate hike October 1, Florida Gov. Charlie Crist was very critical of the company citing legislation the state passed earlier in the year to increased it’s Hurricane Catastrophe Fund by $12 Billion. The fund gives insurance companies a cheaper reinsurance option and was expected to save the industry millions in the state.
While Allstate did lower rates earlier this year by 14%, regulators felt the company didn’t pass on enough savings to customers which was a prime reason for denying this rate increase. The company’s stated that the reason for the increase was that it’s assets were not sufficient to meet all their claims in a worst case scenario.
It will be interesting to see what Allstate’s next move will be. They do have the option of filing a petition for a hearing before the state’s Division of Administrative Hearings.
In the past, Allstate hasn’t been shy about leaving states that the company felt presented an unwarranted risk to it’s overall business plan. Earlier this year the company announced it was leaving the property insurance market in California due to the high risk of wildfires in the state.
In a side note some industry analysts predicted insurance rates for all fields will either decline or remain flat for 2008.
