Universal asks for 22 percent hike in homeowner insurance rates
Aug 2, 2012
The following article was published in The Florida Current on August 2, 2012:
By Gray Rohrer
Citing large losses from sinkhole claims and uncertain results of legislation aimed at curbing them, officials from the Universal Insurance Co. of North America asked state regulators Thursday for a 22 percent statewide average increase in homeowner policy rates.
Universal has 64,000 policies in Florida – not to be confused with Universal Property and Casualty Insurance Co., which has at least 500,000 policies – but experienced $150 million in sinkhole losses in 2011.
“Our goal with this filing … is to return the company to profitability; to add to rather than to deplete our surplus,” said Patrick Constantine, Universal vice president of property and product management.
Universal officials also noted that the effect of SB 408, which lawmakers passed in 2011, will be uncertain for the foreseeable future. The law made sinkhole coverage optional and reduced the time for filing claims after a loss to stamp out skyrocketing sinkhole claims in recent years, many of which were cosmetic.
But Universal executives said they just had their forms approved by the Office of Insurance Regulation in June to implement the SB 408 changes in their policies, and those will only apply to new business, not renewal policies. Not until 2014 would all policies include SB 408 provisions, and since a two-year reporting timeline is called for under the law, it wouldn’t be until 2016 when the full effects of the law could be known, they said. Plus, court interpretations could diminish the anticipated savings of the law.
“We all hope that SB 408 will bring some market stability,” said Jorge Gomez, Universal vice president of legal and regulatory affairs. “I know for a fact in the next two to three years we’ll be deeply challenged by policyholders that will challenge the five definitions of what structural damage is.”
OIR will render a decision on the rate increase in the next few months.
View the original article here: http://www.thefloridacurrent.com/article.cfm?id=28747708