State Farm Fla. Seeks 47.1% Home Rate Increase

State Farm Florida, which last year cut its home insurance rates by 9 percent, filed a request with regulators yesterday for a 47.1 percent increase.

The company, which is currently not writing new home insurance business in the state, said it sought an increase from the State Office of Insurance Regulation to “cover the expected costs of loss and operating expenses”

Edward Domansky, speaking for the OIR, said because the request was for more than 15 percent, it automatically would be the subject of a hearing, which will be held Aug. 12 in Tallahassee.

He said staff actuaries and analysts were already doing a thorough review of the filing to make sure it complied with state regulations, and to ensure the rates sought are not “excessive, inadequate or unfairly discriminatory.”

A few weeks ago, Farm Bureau requested a 28.4 percent rate hike that is due for a July 30 hearing.

Last year, an Allstate request for rate boosts up to 41.9 percent were put on hold after the company refused a regulatory request for documents, arguing it involved disclosing trade secrets.

A court battle ended with a ruling in OIR’s favor, and the matter will now be the subject of a Sept. 15 proceeding before the Florida Division of Administrative Hearing that will examine whether Allstate falsely certified its September rate filing and falsely asserted trade secrets.

Michael Grimes, a spokesman for State Farm, said in 2006 the company sought a 52 percent rate increase, which was eventually halved.

“While this rate increase poses a difficult situation for our customers and our company, it is the only responsible choice. We must stabilize State Farm Florida’s financial condition in order to pay our customers’ claims, particularly those due to catastrophic events such as hurricanes,” he said.

According to a State Farm briefing paper, at current rate levels, State Farm Florida “will soon be unable to cover expected costs of loss and operating expenses.”