Double Digit Rate Hikes for Allstate in Florida

Florida’s consumer advocate says Allstate’s two Florida home insurers are among the state’s best run and deserve double-digit rate increases along the lines they have requested.

The Allstate units, Castle Key Insurance Co. and Castle Key Indemnity Co., which insure 266,000 homes, are seeking average rate increases of 31.2 percent and 35.7 percent, respectively. The two companies represent the fourth and sixth largest home insurers in the state.

At a recent public hearing, the insurers found unexpected support from the state’s Office of Insurance Consumer Advocate. Steve Alexander, actuary for the consumer office, said that out of the 47 Florida-exclusive insurers providing homeowners insurance in the state, the two Allstate insurers are among the most efficient when it comes to costs. “They have some of the lowest expenses in the state, which I think is a real plus,” he said.

He also applauded their willingness to do business in Florida with all the risk that entails, when they could be earning a guaranteed quarter of a point on a one-year U.S. Treasury bond.

Alexander recommended that Castle Key Insurance Co.’s proposed 31.2 percent increase be reduced to 23.7 percent. He also recommended that Castle Key Indemnity’s proposed 35.7 percent increase be increased to 46.9 percent on the basis that it be phased in over a two year period.