Jul 23
Reinsurance Coverage Law Benefits Floridians
Private reinsurance companies in Florida can now obtain less expensive reinsurance coverage, which helps them pay claims after a devastating event, like a hurricane. The reinsurance coverage comes from the state fund and the companies are required by Florida law to pass that savings on to their customers.
The insurance companies will file rate filings to the state by March 15, reflecting the “catastrophic fund” savings. They will then make rate adjustments for policies that renew after June 1. Many customers will save money as a result of these changes – about 10 percent in the panhandle to about 50 percent in the Miami area.
Since the state’s projected savings are an average, though, the rate reductions will depend on individual policies, which factor in geographic location, the insurance company itself and how much savings the company will realize from being able to buy the state-backed reinsurance.
Consumers should also note that if the state has already approved a rate increase for their particular private insurance company, the property rates will increase, but not as much as they would have. Florida’s largest home insurer, Citizens Property Insurance Corporation, will not see savings from the new plan because the state-backed company does not have private reinsurance. Instead, policyholders will receive a separate refund.
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