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Hurricanes bypass Florida, but insurance rates rise | News

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Hurricanes bypass Florida, but insurance rates rise
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Hurricanes bypass Florida, but insurance rates rise

Tampa, Florida -- Six years ago, Florida saw the massive destruction that hurricanes can cause and that made life miserable for many Floridians.

Those storms were quite a shock to people who had moved to Florida and never experienced a Hurricane. Caroline Garland, who moved to the area in 2003, was a prime example. Garland says the first year she moved here was fine, but the second year when the hurricanes hit she said to her husband, what the heck were they doing here. Garland says before moving to Florida she didn't know what hunker down meant.

But in 2004 Floridians were being told to hunker down almost every weekend and emergency operations centers were staffed 24/7. That year the state experienced one of the busiest hurricane seasons in recent memory. By 2005 Florida was brushed by a couple of hurricane that didn't do extensive damage to the state. Since then, Florida has dodged a bullet every hurricane season including this one which would lead most people to believe insurance rates would go down. However, that has not been the case at all.

Garland says the rates keep going up and every year. She and her husband hold their breath as they open the bill to see how much it is going to go up.

Bob Hunter of the Consumer Action Network says he thinks it's price gouging. Hunter, who is a former Texas Insurance commissioner, says while it is understandable rates went up after the 2004 and 2005 hurricane season, those claims have been paid.  Hunter says consumers had to pay higher premiums during the years when the storms hit the state because insurance companies had to pay high premiums for policies the companies buy called reinsurance. 

However, Hunter says the reinsurance rates have dropped sharply lately and the rates in his view should be going down more than the rest of the country. But he says in fact they are going up in Florida and he finds it disturbing.

Florida Insurance Commissioner Kevin McCarty says rates continue to climb because the state is still hurricane prone and non-hurricane losses have gone up 65 percent for insurance companies. McCarty says many of those losses come from sinkholes.

Sam Miller the president of the Florida Insurance Council, an industry group says consumers are not be gouged.

Miller says Florida has the reputation of being one of the most rigidly regulated states in the country and consumers are well protected.

But since 2003 premiums have gone up 70 percent to Florida homeowners and this year 45 companies have been approved to raise their rates an average of 15 percent.

Hunter says he thinks insurance companies are not competitive in Florida, because they know they can charge whatever the traffic will bear and competitors won't be stealing their business.

In addition, all Florida homeowners pay a surcharge for the state created Citizens insurance. The surcharge is on the homeowner's policy and allowed to be added to auto policies as well.

Garland says it doesn't make sense to be penalized because of problems with another insurance company.

It may not make sense, but it ends up being big bucks for Florida homeowners regardless of what company insures them. While we can't be sure next year the area will be as lucky as it was this year in avoiding hurricanes, what is almost certain is that homeowner's insurance  premiums will go up next year again.

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