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Florida's Mandated Property Insurance Discounts Range to 53%

Florida property insurers would be required to reduce rates by as much as 53% under the terms of "presumed factors of savings" released by Insurance...
March 6, 2007

Florida property insurers would be required to reduce rates by as much as 53% under the terms of "presumed factors of savings" released by Insurance Commissioner Kevin McCarty. The presumed factor savings are mandated by a recent state law expanding the state's catastrophe fund and must be filed by insurance companies with the Florida Office of Insurance Regulation and then they are to be applied to the hurricane portion of a homeowners premium, depending on where property is located among 25 rating territories sorted by ZIP code.

According to reports, lower-risk areas such as inland areas of the Florida Panhandle, will see more modest decreases than those areas such as along the southeastern shores, such as Dade and Broward counties. That prompted Liz Reynolds, a state affairs manager for the National Association of Mutual Insurance Companies to comment, "It's very interesting that some of the greatest discounts are for areas of the highest risk, which seems to fly in the face of actuarially sound rate making." Florida recently hired as its actuary to set rates on this project J. Robert Hunter, perennial industry critic and insurance director of the Consumer Federation of America.