Fw: State Farm can raise rates 22.3%

[Guest guest]

> --------------------

> State Farm can raise rates 22.3%

> --------------------

>

> By Greg Groeller

> Sentinel Staff Writer

>

> October 16, 2002

>

> State Farm Insurance Co. said Tuesday that it will begin writing new

homeowners insurance policies in Central Florida and other parts of the

state -- but only on a limited basis.

>

> The move came a day after Florida's largest insurer won a 22.3 percent

average increase for homeowners premiums from a state arbitration panel.

>

> Rates will rise an average of 13.2 percent in Orange County, 17.6 percent

in Osceola, 13.2 percent in Seminole, 27.9 percent in Volusia and 3 percent

in Lake.

>

> State Farm stopped writing new homeowners policies in June after the

Florida Department of Insurance rejected the rate increase, saying it had

already approved a separate increase of 14.3 percent last January. State

Farm appealed the decision to a three-person arbitration panel, which ruled

2-1 in the insurer's favor late Monday.

>

> The arbitration panel's decision was bad news for State Farm customer

a DeLorenzo, who said her rates already rose once this year.

>

> " If it goes up another 20 percent, it's almost going to be too expensive, "

said DeLorenzo of Zellwood.

>

> The panel's decision to allow higher rates prompted State Farm to begin

writing new homeowners policies in all Central Florida counties and parts of

northern Florida, said Tom Haggerty, a State Farm spokesman in Winter Haven.

>

> However, the insurer does not want its customer base to grow more than 2

percent annually in each county, so some potential customers may be turned

away, he said. State Farm may adjust the growth rate up or down after June,

Haggerty said.

>

> The insurer has no plans to write policies again in South Florida and the

Tampa area, he said. In other parts of the state, such as the Panhandle and

some eastern coastal counties, State Farm wants a zero percent growth rate,

meaning it will only write a new policy if an existing policy is canceled,

Haggerty said.

>

> The latest rate increase allows State Farm to offset rising claims for

non-catastrophic events such as mold, water damage and sinkholes. It also

helps the company overcome a decade of cut-throat competition that forced

the company to keep rates low.

>

> State Farm has been charging the higher rates on renewing policies since

July. Had it lost its appeal, it would have had to give back the additional

money it collected.

>

> The arbitration panel's ruling forbids State Farm from raising rates for

any one homeowner more than 42.5 percent. Customers whose rates have risen

higher than that since July will receive a refund plus 6 percent interest,

Haggerty said.

>

> Tami , a spokeswoman for the Insurance Department, said the agency

would decide whether to appeal the arbitration panel's decision after it

finishes reviewing the ruling.

>

> Greg Groeller can be reached at 407-420-5471 or

ggroeller@....

>

> Copyright © 2002, Orlando Sentinel

>

> Visit OrlandoSentinel.com