NOAA’s hurricane hunter aircraft hit by turbulence in Hurricane Milton
Bumpy flight into Hurricane Milton on NOAA’s WP-3D aircraft known as Miss Piggy on Oct. 8, 2024. Credit Nick Underwood
- Florida-based insurer TRUE has requested a 31% rate increase on its multiperil homeowners’ insurance policies.
- The company cites hurricane costs and reinsurance expenses as justification for the increase, which would raise average annual premiums by $1,357.
- While other Florida insurers have implemented minimal rate changes or even decreases, TRUE claims the increase is necessary to remain profitable in a tough market.
- State regulators will decide on the rate increase request after the comment period closes on July 1.
The state’s notoriously expensive property insurance may be getting even more costly.
Trusted Resource Underwriters Exchange, which goes by the acronym TRUE, asked state regulators at a June 17 rate hearing to allow the insurer to jack rates up by 31% for its multiperil homeowners’ insurance for tens of thousands of policyholders when they renew this year.
Florida homeowners pay some of the highest insurance premiums in the country, but the increases have recently slowed. If state regulators agree, TRUE’s increase would be the first property insurer among the 87 active property insurers companies to ask for an increase large enough to require a hearing. Overall, most of the state’s insurers have been increasing their rates in the low, single digits, or slightly decreasing them during the past year.
The Tampa-based insurer says it really needs nearly twice what the insurer is asking state regulators to approve, Anthony Scavongelli, the exchange’s CEO told state regulators. He blamed last year’s string of hurricanes, its Florida-only book of business that has little risk spread around and the cost of back-up capital it needs to insure itself against catastrophic claims. In addition, the company’s previous management had not kept its rates accurate for those conditions, he said.
“Our analysis indicated support for a nearly 60% rate increase driven largely by hurricane and reinsurance costs,” Scavongelli said during a virtual hearing.
If the rate change is approved, it would mean a $1,357 bump from the average annual premium for multiperil homeowners’ insurance TRUE’s customers now pay. It’s needed for TRUE to remain in the market, which Scavongelli called “a very difficult market, made worse by inflation and reinsurance costs.”
A decision is not expected until after the comment period on the rate increase request closes July 1, according to a spokeswoman for the state’s insurance regulation office.
State records show that TRUE has fewer than 20,000 policies in force — about 50th in size among the state’s property insurers. TRUE started writing policies in Florida starting in 2021 and has undergone two changes in management since then, with the latest team in place since 2024, company leaders told regulators.
The Florida Office of Insurance Regulation scheduled rate hearings when insurance companies file for increases of 15% or more. Between 2021 and 2022, when the state’s insurance market was wobbling and a credit ratings agency threatened to downgrade dozens of Florida insurers, rate hearings were common, with some asking for increases of 30% or more. Industry reports show only last year has the Florida insurance market taken in more money than it paid out for claims and expenses.
Overall, other companies’ rate changes more modest
Lately, though, on the heels of changes to the state’s tort laws that removed much of the incentive for attorneys to litigate claims disputes, property insurance rates have increased minimally or dropped slightly. S&P Global report issued in February showed Florida’s average insurance increase was 1% in 2024, the lowest increase of any state, although that data was limited to analyzing rates from each state’s largest 10 insurers.
Other insurance companies have called the results of the last hurricane season “manageable,” however, and the drop in the cost of fortifying back-up catastrophe funds have dropped since the risk of lawsuits has decreased with the 2022 changes in the state’s rules regarding suing insurance companies.
State officials offered no direct commentary on the validity of the rate increase request, but Daniel Zhong, an actuary with the regulatory office did say one of company officials’ responses to his questions was “not entirely correct.” He also asked company representatives to explain the basis for the “large” rate increase requested.
Company playing ‘catch up’ after management changes
He noted that the company had not made its state-required annual filings. Yanfei Atwell, TRUE’s director of actuarial services, said the company expected to make more consistent and less substantial rate changes in the future.
“The 31% rate change is major, is a catch up of the annual rate (filing) that we missed,” Atwell said. “So on a going-forward basis, we’re planning to be in compliance and following the annual filing, and it will not be such a huge rate increase. It will be much more moderate.”
Susan Anderson, general counsel for TRUE, said the rate increase reflects the new management’s view.
“The first rate filing by this management team is intended to take the rate necessary in order to continue to be a profitable company,” Anderson said.
Ten property insurance companies went insolvent in Florida between 2019 and 2022.
Anne Geggis is the insurance reporter at The Palm Beach Post, part of the USA TODAY Florida Network. You can reach her at ageggis@gannett.com. Help support our journalism. Subscribe today
Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.