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Here’s why property insurance premiums could be going up in Florida and in Tampa Bay
June 13, 2018
Three major hurricanes caused about $80 billion in insured losses nationwide for property and casualty insurers in 2017, but in Florida, legal maneuvers are as much a factor as weather in driving up pricing on homeowners’ insurance policies, a new report says.
“Pricing on homeowners’ property risks in Florida continue to increase, but not as a direct result of catastrophe loss activity,” according to the report from Fitch Ratings. “Accusations of fraud and abuse of assignment of benefits clauses [a legal tool that allows a third party to be paid for services performed for an insured homeowner] and the proliferation of nonwind, water-related claims, specifically litigated claims, led many property insurers to push for rate increases in recent periods.”
The Florida Office of Insurance Regulation this year approved changes to the annual rates for Citizens’ Property Insurance Corp., Florida’s state-sponsored insurer of last resort, with an average statewide 5 percent increase, effective as of May 1.
Price increases intended to address the assignment of benefits issue in Florida may still not be enough to reflect the catastrophe risk faced by property insurance companies in the state, the Fitch report said.
Overall, property and casualty insurance firms overall are “well-positioned” for what is likely to be an average hurricane season in 2018, according to U.S. Hurricane Season 2018, Fitch Ratings’ annual hurricane season preview.
But insured losses last year from three hurricanes — Harvey, Irma and Maria — is likely to result in pricing increases in most lines, the report said.