HILLSBOROUGH COUNTY, Fla. — Castle Key Insurance will make its case Wednesday afternoon to the Florida Office of Insurance Regulation on why it should approve a rate increase requested in March 2023.
The increase would impact about 105,000 customers, but those customers have already been paying the increase since May 2023.
"This is highly unusual to have a rate hearing so long after the rate request was made," said Mark Friedlander with the Insurance Information Institute. "That’s a question for the regulator to answer. We can’t answer that — we can’t even speculate why there’s been such a long delay. But, I’ll be honest, I’ve never seen such a long delay from when the rate request was made and when it was implemented.”
In many states, including Florida, there’s a rate change process called “Use and File.” That’s where a company can implement a rate increase before it’s been approved.
Friedlander said that also means policyholders who have already handed out the extra cash every month will likely get credited if the hike is not approved by the state.
Amica Mutual Insurance made its pitch Tuesday to the Florida Office of Insurance Regulation to raise rates for some policyholders. But the impact may not be as much as originally feared.
"It's a very small line of business for us," said Mike Petrarca, Amica's Department Vice President.
Amica told the public Tuesday that the increases will only apply to about 500 policyholders of the 17,000 thousand homeowners. Those impacted are those who have a "fire dwelling policy," which is primarily those who have secondary homes or rental properties.
According to numbers presented at the hearing by Amica, the average dollar amount increase would be approximately $156, from $295 to $451. Still, that increase will range from 28%-79% for those impacted by the possible increase.
"I want to reiterate, the decision to file for this magnitude of change did not come easy for us," Petrarca said.
Northport resident Pam Tokarz has been an Amica customer for more than 20 years and has only seen incremental rate increases. She was bracing for big impacts.
"We're on a fixed income. We're retired," she said. "We moved down to Florida like everyone else to retire and hopefully have our costs stay low."
For now, she's spared as her policy is her primary residence. But she feels this will only set a precedent for another round of rate increases in the future.
"Now, my concern would be, even though it's affected second homes, what's to stop them in the future?" she asked. "I'm going to be prepared for that."
Some have wondered if these recent rate hike increase requests are a sign both companies are ready to exit Florida. Friedlander doesn't think so.
"If a company wants to withdraw from the market or start to not renew policies, they're not going to do the rate increase. That's just not a logical process," he said.
Florida's Office of Insurance Regulation did not make a ruling after Tuesday's public hearing and is still accepting public comments. If you want to weigh in, you can email your thoughts or concerns to RateHearings@floir.com through March 5.
Castle Key's public hearing is scheduled for Wednesday at 2 p.m. and is open to the public.
