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Long-awaited relief on the horizon as insurance rates decline

Florida’s hurricane season has been relatively uneventful for the past eight years. Instead of seeing insurance rates die down along with the wind and the rain, however, residents have witnessed their highest-in-the-nation rates stagnate or increase. In 2013, for instance, rates went up by 11 percent, the second-highest increase in the U.S. that year.

The tide, however, may be turning. As we discussed in January, insurance rates were looking as though they might fall. Florida’s insurance commissioner said then that some of the state’s insurers had requested rate decreases. While he hasn’t provided an update, the signs are good today that this holds true.

One reason Florida homeowners’ insurance rates may improve is that reinsurance has become less expensive for the insurers themselves. Reinsurance is used to help insurance companies pay out large claims.

Although reinsurance costs have lowered, some argue that they could be smaller still. One consumer advocate cautions against allowing insurance companies to buy reinsurance from entities with which they are affiliated, because this discourages them from seeking lower rates. Others, however, say that insurance rates have stayed high because of higher claims concerning water damage and sinkholes.

No matter the reason for the high rates that finally seem to be changing for the better, Florida homeowners surely will welcome relief. Unfortunately, whether their rates are high or low, some Florida homeowners will experience unreasonable insurance denials. When that happens, the assistance of a knowledgeable, experienced Florida attorney can make the difference between sinking and staying afloat.

Source: Tampa Bay Times, “Florida sees small break in deluge of rising property insurance rates,” Jeff Harrington, May 12, 2014

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