The largest players in Southwest Florida's homeowners insurance market have made their case to raise rates from 10 to 33 percent on average. Consumers are scrambling to find more affordable coverage.
"People are angry," said Tim Shaw, CEO of Tim Shaw Insurance — Ascentria in Fort Myers. "My phone is ringing more than ever before."
Finding a carrier with lower rates may not be simple.
In the past few weeks, State Farm Florida, the Castle Key companies, Universal Property & Casualty and the state-backed Citizens Property & Casualty have all moved for higher rates.
Rate hearings have been held for State Farm, Universal and two Castle Key companies, which are Allstate subsidiaries. They are awaiting rulings from Florida's Office of Insurance Regulation. Citizens Property Insurance board of governors voted to request a 10 percent rate increase July 27. Citizens increases are capped at 10 percent annually.
Combined, the companies accounted for just more than 82,000 single-family homeowners policies in the five-county region at the end of the first quarter, or about 30 percent of the market.
San Carlos Park resident Mary Lou Sowa, 65, said the State Farm policy on her home has already increased 61 percent over the past two years to $2,900 and that doesn't include the 14.9 percent increase the company has requested.
"The thing is, I've already had all of these increases and now they are looking for more," Sowa said, adding her agent blamed the previous increases on sinkhole claims in central Florida. "I got a letter last month that my escrow payment on my mortgage is going up $135 a month. I'm on a fixed income, and I don't know how, but I guess it will get paid."
State Farm Florida spokeswoman Michal Connolly said the rate request reflects the increased cost of doing business in Florida, including the cost of buying reinsurance to protect itself from losses.
"A lot of thought and research goes into a request like this," Connolly said. "We don't go into these things lightly."
Shaw said reinsurance accounts for 50 to 60 percent of the annual premiums customers pay to their insurance carrier. Florida homeowners policies may be three times higher than what a consumer would have paid in a Midwestern state, Shaw said. The difference largely comes down to hurricanes.
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He said he expects most insurers to seek additional increases over the next few years.
"It's a challenging market, no question," Shaw said.
Kristen Watson, spokeswoman for Universal Property & Casualty, said the company's 22 percent rate increase is necessary to serve customers.
"We want to be here for the long haul," Watson said. "We make a promise to our customers that we are going to be there to pay when they make a claim. We have to make sure we can keep that promise."
Ted Todd, president of Bonita Springs-based Ted Todd Insurance, said customers stepped up their comparison shopping last year when a couple of dozen smaller insurers were granted rate increases.
"People have never stopped shopping on price," Todd said. "But it has tightened up a little this year because you have a number of companies in Florida that are getting near capacity where they simply won't write more policies."
Brad Havemeier, president of Naples-based Gulf Shore Insurance, said he is concerned some consumers will be too aggressive in holding costs down.
"They will be susceptible to promises that they don't need certain limits or that they can get by with less coverage and that can be a problem," Havemeier said.
Bob Wallace, 62, who lives off Gladiolus Drive in south Fort Myers, said he breathed a sigh of relief this year when his policy renewal from St. Johns Insurance Co. didn't include a rate increase.
"I think that probably just means we are standing in line, though," Wallace said. "The Florida insurance companies have all of their customers and the state snowed us into thinking we are all insuring against some catastrophic hurricane loss."
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