That would hardly affect the double-digit premium increases millions of statewide homeowners have endured for years — if these companies actually pass those savings on to their customers.
The law creating the fund makes no guarantees that the companies will pass the savings on to consumers. Many simultaneously file for rate increases to cover the higher costs of private reinsurance they purchase to cover themselves in the event of major disasters.
Republican state Sen.
The policyholder assistance reinsurance or RAP program was approved during a special session called by the government.
Insurance companies that wanted to take advantage of it this year had to hurry if they wanted to meet
“OIR is expediting its review of these documents and ensuring that the documents submitted are consistent with recently enacted legislation,” they said
Opponents have called it an industry bailout that won’t lead to savings for consumers. It looks like they were right based on the savings companies are offering.
“This is not only what we feared, but what many lawmakers said would happen,” said
On a positive note, Newton said, this reinsurance plan is backed by
“As long as it can offer insurance at reasonable prices, the market will be stable, sort of, and the private companies will also have to keep their rates low,” Newton said. “Citizens are what hold it all together. Oh, and Citizens makes money most years even though it has the highest risk customers. I guess it’s not that hard to make money in the insurance business.
Recently, citizens demanded an increase in the rate by 11%.
Insurance costs have risen since DeSantis was sworn in
Reinsurance is insurance for insurance companies to cover claims that they do not have the capital to cover themselves. Reinsurance companies are not regulated by the state and have increased their fees as Florida insurers have become more dependent on them to cover catastrophic claims.
The RAP program provides a breath of fresh air for these local insurers, allowing them to take advantage of
The catastrophe fund kicks in when it causes a hurricane
This money will not go to the insurers unless there is an actual disaster, such as a major hurricane, and they need it to cover damage claims.
The 68 separate interest rate statements from 59 companies show how much they would theoretically save using this free money. Premium savings range from a low of 0.7% to a high of 3.9%, with most in the 1% to 2% range. Many of these rate changes won’t go into effect for months.
For the average homeowner, this means savings from every location
The companies provided pages of documentation and worksheets showing how much savings they could pass on to their policyholders.
But submitting percentages is everywhere. Some indicated the dollar amount they could return to policyholders, while most only showed a percentage reduction of what they recovered that could be passed on to policyholders. Several hid their plans as trade secrets, a tactic that troubled the state representative.
“People are in the dark and they want answers,” Escamani said.
Some companies encountered problems in calculating their estimated premiums, damages and interest refunds, and state regulators had to point them out and force them to correct their mistakes. In one case, officials told Berkeley they used the wrong growth numbers to determine insurance premiums and suggested a way to get a more reasonable estimate of the savings.
At least one company, Foremost, did the math and decided it wasn’t worth participating until OIR officials convinced them otherwise.
Some companies applying for RAP are experiencing financial difficulties.
United Property and Casualty of
United stopped issuing new policies in February and is considering a sale or merger to stay afloat, insurance industry publications said. It recently asked the government for a 15% rate hike.
“Our fears are being confirmed that the special session was more about bailing out the insurance industry than giving consumers a break,” Escamani said.
“Citizens become the resort’s only insurer,” Escamani said. “None of this is sustainable at all.”
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