What’s that squeal you’re hearing as the remnants of Tropical Storm Fay finally leave the sunshine state? It’s the sound of Florida’s property insurers squirming as hundreds of thousands of claims begin pouring in.
But don’t be fooled. The squealing started before Fay was even a dark cloud over Cuba. As the hurricane season kicked off this summer, some of Florida’s largest insurers boldly petitioned the state’s Office of Insurance Regulation for rate hikes, some as much as 63 percent. But as Fay was bearing down on Florida, our state’s Insurance Commissioner Kevin McCarty batted away these pesky rate hike filings like a swarm of mosquitoes off a retention pond.
Farm Bureau wanted an average 28.4 percent hike. Smack!
State Farm wanted an average 47.1 percent hike. Smack! Smack!
Gov. Charlie Crist got his proverbial panties in a wad when insurance companies were lax in complying with new legislation meant to reign in insurers and lower costs for homeowners. His Terminator in this battle is Kevin McCarty, empowered with new regulatory control courtesy of Florida’s House and Senate.
He may very well have these corporate titans of indemnity scratching their heads and muttering “Surely, you can’t be serious,” as he denies their 2,000 page filings.
I imagine McCarty must feel good in replying “I am serious and don’t call me Shirley!”
And all this on the heels of the state’s settlement with Allstate Insurance that requires the insurance giant to pay a $5 million fine and lower its homeowner’s insurance rates in all territories of the state by 5.6 percent for a total reduction of 19.8 percent when including the 14.2 percent reduction that took effect June 1, 2007. Allstate also must write 100,000 new homeowners insurance policies over the next three years; and Allstate’s corporate office must cancel a $175 million surplus note it issued to the Florida Allstate companies.
Now it's time for Florida’s insurers to deal with flooding of their own – a rising tide of homeowners claims. State Farm, the state’s largest private insurer, reported approximately 4,000 homeowners claims and over 750 auto claims as of Friday.
Somehow, I don’t think the state’s insurance regulation Terminator has heard the last of it. I’m sure State Farm and others like them will be telling Terminator McCarty this week “I’ll be back!”