Newspaper article The Florida Times Union

Nationwide Sought 71% Rate Hike; State Says No Deal; Regulators: Increasing Homeowners Premiums That Much Isn't Justified

Newspaper article The Florida Times Union

Nationwide Sought 71% Rate Hike; State Says No Deal; Regulators: Increasing Homeowners Premiums That Much Isn't Justified

Article excerpt

Byline: URVAKSH KARKARIA

State regulators have turned down Nationwide Insurance Co.'s request for a 71.4 percent statewide average hike in homeowners insurance, saying the increase wasn't justified.

Under the rate request filed in July, policyholders in Duval County, for instance, would have faced a 15 percent to 39 percent increase in their homeowners policy rates and policyholders in Clay could expect a 73 percent hike.

Nationwide, which has more than 253,000 policies statewide, including nearly 17,500 on the First Coast, didn't provide documentation or evidence to support the rate increase it was seeking, Bob Lotane, spokesman with the Office of Insurance Regulation, said Wednesday.

The company is "concerned with the denial of the rate request given the risks and challenges that are very real in the Florida insurance market," Columbus, Ohio-based Nationwide said in a statement. "The rate request reflects the cost of doing business in Florida. Just like every individual Floridian, insurance companies also need to be prepared when catastrophe strikes."

In recent months, state regulators have rejected rate hike requests from several insurers, including Cincinnati Insurance Cos. and Home Pointe Insurance Co.

The rejections of rate hike requests could be politically motivated, one industry insider said.

"It's an election year ... and [voters] are upset about rising rates," said Jeff Grady, president of the Florida Association of Insurance Agents. "I believe that influences how the regulator evaluates these rates."

Lotane flatly denied that charge.

"Our decisions are based on actuarial science, they are based on whether the filing is adequate, whether it is not excessive and not discriminatory under Florida law," he said. "Politics never enters into our rate reviews."

The majority of Nationwide's proposed rate increase would have covered rising reinsurance costs and the rising costs of building materials and labor, the company said in July. Insurers buy reinsurance to help offset the cost of paying claims after a major storm or other catastrophe.

The OIR, in a statement, said it didn't find "sufficient support in the filing to justify the request. …

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