Guest guest Posted August 9, 2002 Report Share Posted August 9, 2002 http://www.gopbi.com/partners/pbpost/epaper/editions/today/business_d3058af2 63b171df0090.html Arbitration to settle homeowners rate dispute By Jeff Ostrowski, Palm Beach Post Staff Writer Wednesday, August 7, 2002 A three-member panel will settle the dispute between the state's largest homeowners insurer and Insurance Commissioner Tom Gallagher. State Farm officially appealed Gallagher's rejection of a proposed 22 percent rate hike, Gallagher spokeswoman Tami said Tuesday. Blaming the rising costs of toxic mold, water damage, sinkholes and liability claims, State Farm asked for the hike earlier this year. The hike would hit homeowners in Palm Beach County and the Treasure Coast harder than the average Floridian. State Farm sought increases of 55 percent in County and 30 percent in Palm Beach and St. Lucie counties. Gallagher in June rejected the rate hike as " beyond reasonable, " and State Farm responded by saying it no longer would take on new homeowners policies in the state. State Farm asked for a three-member arbitration panel to hear the matter; the insurer also could have asked for an administrative judge to resolve the dispute. Consumer advocates such as the Florida Consumer Action Network say arbitration panels are stacked in favor of insurers, and most arbitration hearings have resulted in rate increases since the state began using the panels in 1996. But it would be inaccurate to call arbitration a rigged system, said, because not all of the increases represented outright losses for consumers. In many cases, the arbitration panel approved a rate hike that was smaller than the insurer had proposed, she said. Gallagher named Hunter, director of insurance at the Consumer Federation of America, to represent the state on the arbitration panel, said. State Farm, which covers 980,000 homes in Florida, already has begun collecting the higher premiums and can continue to do so until it exhausts its appeal. Gallagher has yet to rule on a proposal by Allstate, Florida's second-largest insurer, to raise rates by 21 percent. Allstate, of Northbrook, Ill., covers 750,000 homes statewide. jeff_ostrowski@... Quote Link to comment Share on other sites More sharing options...
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