State Farm Mutual Automobile Insurance Company filed for property rate increases of 71.5 percent in Florida, according to state regulatory filings.
Florida Office of Insurance Regulation spokesman Bob Lotane said State Farm filed for a 58.5 percent increase to cover the cost of reinsurance and a 12.7 percent increase to cover additional costs. The rates would take effect Sept. 1 for renewal business.
Mr. Lotane said the larger increase will most likely be approved once the costs have been documented, but there could be some discussion on the 12.7 percent figure.
The state holds a public hearing before ruling on any increase over 15 percent.
In some areas of the state, the requested hike will be much larger, such as mobile homes in Palm Beach where State Farm is seeking a 117.7 percent hike. For reinsurance costs in Monroe County, it is requesting a 225.6 percent increase.
Commissioner Kevin McCarty said in a statement he was "deeply concerned" about the effect of such rate hikes, but did not say he would oppose them.
Major writers such as Allstate and Nationwide have announced plans in the past few months to cut back on their catastrophe exposure. Allstate has reached agreement with a number of companies to offer to more than 200,000 of their policyholders coverage from smaller companies.
Last week, the Florida Legislature approved a series of provisions aimed at shoring up smaller companies by providing them greater access to the Florida Hurricane Catastrophe Fund and providing capital to build up surpluses.
In a related development, Lauderdale Lakes, Fla.-based 21st Century Holding Company said it would put off yearly guidance because of escalating costs of reinsurance. Ted Lawson, chairman of 21st Century, said his company would be seeking a 49 percent rate increase to make up for reinsurance costs.
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