MIAMI – June 7, 2019 – Hurricanes gave South Florida a break last year, and State Farm Florida listened. The company is dropping rates for its 270,000 Florida customers by an average of 14.4%.
It's a rare bit of good news for Florida, where hurricanes frequently bring higher home insurance rates. For any homeowner with a mortgage, storm insurance is required by lenders.
The reason for the rate drop: lower costs for State Farm. "We had few losses compared to previous years, so our savings will benefit our clients because we have additional funds," said Jose Soto, a public relations official with State Farm Florida.
The rate decrease took effect May 15 for clients buying new policies; existing policy holders will see the decrease beginning July 1. Total savings to policy holders will be $95.9 million in premiums over 2018. Individual savings will be determined according to the details of each policy. Because of billing cycles, some policyholders will not see the savings until their escrows are settled at the end of the year.
For some customers, the savings will be significant. Maria Elena Cisneros, a Miami insurance agent with nearly 30 years of experience, said that one of her clients will save $400 per year.
Dan Krause, a senior vice president at State Farm, said the reduced costs were the result of "the stable tendency of non-catastrophic losses, improvements in costs and losses and the financial strength of State Farm."
The rate decrease is possible even though 5,090 policyholders filed claims with State Farm for damage caused in the Florida Panhandle by Hurricane Michael, a Category 5 storm.
State Farm Florida was established after Hurricane Andrew in 1992 as a subsidiary of the national State Farm company. Because the Florida company is a mutual company owned by its insured clients, the decrease in losses is passed on to clients.
Although the company retained some of its old clients, it now only issues new policies for properties built under the state's 1994 building code, which increased standards.
The company is sending letters to its clients announcing the rate cuts. It recommends that anyone with questions contact their insurance agents.
To date, no other Florida property insurance companies have decreased rates, according to the Florida Office of Insurance Regulation. Homeowners can compare rates on the state website's comparison tool.
© 2019 Miami Herald, Sarah Moreno. Distributed by Tribune Content Agency, LLC.