News 4041 Florida Home Insurance Companies Rates Profit Margins

The last two home insurance companies to seek rate increases in Florida, Nationwide and State Farm, are doing so under a barrage of negative attention. The latest price of information to roll out concerning the two insurers is that the profit margins included in their rate hike requests are nearly 15%. The state average is just over 3%. The companies claim they are not trying to pad their pockets and line their wallets. They are trying to make up for the severe losses they absorbed after eight hurricanes struck Florida in the past two years. Nationwide of Florida says they lost all of the profits they made in the state since 1992 because of the large numbers of claims since 2004. State Farms also says they have struggled, having to ask their parent company, State Farm Mutual for more than $750 million to subsidize claims payments. "If anyone is implying there's any profit motivation, they're mistaken," says Chris Neal, spokesman fro State Farm. Joe Case of Nationwide agrees, saying "To call it a profit is a misnomer. We're playing catch-up in our rating and our ability to capitalize Nationwide of Florida." Regardless of what consumers or the consumer advocate believe the profits are reasonable, the Insurance Commissioner's Office has pledged to review all rate changes carefully and if they contain unacceptable elements, they will be refused.

Read more: State consumer advocate suggests insurers are inflating hike requests (The Palm Beach Post) When two of Florida's largest insurers requested huge rate hikes recently, they also asked for profit margins of about 15 percent, much higher than the industry average. That has the state's insurance consumer advocate asking whether the insurers are inflating their rate hikes.