Scott requests to freeze property insurance rates following Hurricane Michael
Despite projected $4.5B in damages, Florida insurers are not expected to face major issues
Florida Gov. Rick Scott is seeking to keep insurance property rates steady in the wake of the damages caused by Hurricane Michael.
Scott directed Florida’s Insurance Commissioner David Altmaier to freeze property insurance rates for 90 days as businesses and residents recover from the hurricane, according to the Tampa Bay Times. He also directed Altmaier to give policyholders more time to find coverage by rescinding all policy non-renewals or cancellations for 90 days for policies that had been issued in the days leading up to the storm.
The hurricane made landfall in the Florida Panhandle on Wednesday, Oct. 10 as a Category 4 storm.
In total, the Property Casualty Insurers Association of America projects that insured losses from Hurricane Michael could range from $2 billion to $4.5 billion.
These losses won’t be big enough, however, to cause major problems for Florida insurers, according to the Insurance Journal. The ratings firm Demotech said Florida’s insurance companies and those in surrounding states are able to handle any losses due to a “rigorous and vigorous” catastrophe reinsurance program, the Insurance Journal reported.
Instead, the pressure will fall on reinsurers, or insurers for insurance companies, that have a high amount of exposure to Florida companies.
Many national insurers have backed out of the Florida market after Hurricane Wilma hit in 2005. Since 2007, the state has also tried to move homeowners off of the state-backed Citizens Property Insurance Corporation and onto the private insurance market. As a result, companies that once had a much smaller share of Florida’s insurance market now have a much larger share of the market. [Tampa Bay Times] and [Insurance Journal] –Keith Larsen