Some auto, home insurance rates declining in Florida
We all know the phrase “What goes up must come down.” Some people think this saying applies to everything except insurance. But they’re wrong. For many Floridians, the cost of both auto insurance and property insurance may be going down.
The Office of Insurance Regulation (OIR) recently announced this news, and your first question is probably about how much and how soon any savings will be passed on to you. The quick answer has two parts: It depends on your insurer’s own loss experience, and if its costs went down, you’ll see it when your policy comes up for renewal.
Let’s start with auto insurance. Florida drivers pay high insurance rates. Yeah, you already know that, and you probably know why. Too many cars, lots of traffic, lots of accidents, some of them faked, and an auto insurance system that made it easy to commit insurance fraud. Florida’s no-fault auto insurance law was changed in 2012 to make it harder for those with an inclination to take advantage of the system, and the changes appear to be working. When claims costs go down, then rates can go down – and that’s starting to happen.
Not every auto insurance company is experiencing a downward trend, however. Of the top 20 auto insurance companies, eight of them are. A few more insurers have looked at their year-end results and are keeping rates flat. The OIR has a chart showing the rate change to date. The reason some companies experienced lower claims costs and others have not has a lot to do with the on/off switch affecting the insurance reforms that launched in January 2013.
For property insurance, Insurance Commissioner Kevin McCarty said this month that his department’s analysis shows homeowners insurance rates are going down in the voluntary market. The voluntary market is the private market, namely insurers other than Citizens Property Insurance. Half of the top 30 insurers have made rate filings that include savings from the latest reinsurance contract year, and all 15 of them showed lower reinsurance costs. Below is a list of insurers that have had their rate decreases approved by the OIR so far.
|Property Insurance Company
Filed & Approved
|Universal Property and Casualty
|Security First Insurance
|Ark Royal Insurance
|American Strategic Insurance
Reductions in costs and insurance claims are reflected in rates, just as increases in costs and claims are. As insurance consumers, a key word to note here is “reflected.” To determine costs, insurers look backwards to plan forward. Costs fluctuate to drive rates up or down, and whatever the rate charged, insurers base premiums on these trends.