Florida Has Highest Homeowner Insurance Rates In U.S. Despite Lack Of Hurricanes

DAVIE, FL - OCTOBER 24: Jennifer Farrington (L) sits on a couch in the middle of a pile of debris after Hurricane Wilma came through on October 24, 2005 in the Palma Nova motor home community in Davie, Florida. Hurricane Wilma hit the western coast of Florida as a Category Three and departed the eastern coast as a Category Two hurricane. High winds from the fast moving hurricane have caused widespread power outages across the state. (Photo by Richard Patterson/Getty Images) 2005 Getty Images

(AP) Nearly 20 percent of the nation's Hispanic population lives in Florida and is paying the highest homeowner insurance rates in the nation even though the state has not been hit by a hurricane in nearly a decade.

A national report released this week shows the average premium for most Florida homeowners is $1,933 a year, or nearly twice the national average of $978. Five of the six states with the highest rates are along the Gulf of Mexico.

The report by The National Association of Insurance Commissioners is based on 2011 rates and includes for the first time premiums paid by customers of Citizens Property Insurance. The state-created Citizens is the largest insurer in the state with more than 1 million policyholders.

Florida’s insurance rates have been steadily going up for the last several years even though the state has not been hit by a hurricane since 2005. State regulators have continued to approve rate increases this year, although there are signs rates may finally be stabilizing.

Chief Financial Officer Jeff Atwater, who has complained that insurance rates in the state should be coming down, said he’s not surprised by Florida’s top ranking.

Atwater has asked Florida’s top insurance regulator to give a detailed report about why most insurers in the state are not lowering their rates since reinsurance costs — one of the biggest expenses for companies — have been declining.

Insurance Commissioner Kevin McCarty was supposed to deliver the report this week, but has asked to delay presenting his findings until mid-January.

“I think people need to be informing the industry that we are watching and we have high expectations that the people of the state of Florida will begin to benefit from cost savings,” Atwater said Tuesday.

Louisiana had the second-highest rates, followed by Texas, Mississippi, Oklahoma and Alabama.

The report breaks out homeowners insurance by various types of policies, but found the average premium of $1,933 for the main kind of multi-peril homeowner policy that is the most commonly purchased in Florida. That same report found that the average premium for insurance purchased by condominium owners in Florida was $804 — or nearly twice the national average.

The report also lists the 10 costliest catastrophes in U.S. history, which include five hurricanes that struck Florida — Andrew, Charley, Wilma, Ivan and Hurricane Katrina.

Katrina hit Florida before it slammed into Louisiana and Mississippi and was the most expensive catastrophe.

Some in the industry have contended that there are legitimate reasons for the current rates in Florida.

Joseph Petrelli, president of the ratings agency Demotech, wrote Atwater last month and said some insurers have purchased more reinsurance protection as the cost has gone down. He also said that overall repair costs continue to mount.

“Upward pressure on premiums from the underlying costs of repairs and the ongoing annual purchase of a substantive, conservative reinsurance program does not lend itself to across the board rate decreases,” Petrelli wrote.

Sean Shaw, the former insurance consumer advocate for the state who is now running for the Legislature, said it was time for “politicians in Tallahassee” to “get this under control.”

“Insurance companies haven’t let the lack of major hurricanes hitting Florida get in the way of jacking up rates on policyholders,” said Shaw, an attorney and founder of Policyholders for Florida. “Move to Florida for no income taxes, leave because you can’t afford property insurance, isn’t the way to have a stable, healthy economy.”

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