Allstate Floridian Scaling Back on Risk; Applies to Drop 95,000 Homeowners

Allstate Floridian, the state’s third-largest provider of homeowners insurance has applied to the Florida Office of Insurance Regulation in Tallahassee to scale back its insurance risk in Florida by dropping 95,000 homeowner’s policies state-wide and totally eliminating its commercial coverage.

Allstate also intends to raise homeowners premiums, but did not indicate how much the rate increase would be or when it would go into effect. The Florida Legislature passed a bill this year requiring public hearings for rate increases of more than 15 percent.

“It’s under review,” Valerie Beynon, an Office of Insurance Regulation told the Miami Herald. “Tomorrow, when everybody wakes up, they’ll still have coverage.”

Allstate policyholders, in fact, can expect to have coverage at least throughout June 1 to Nov. 30 hurricane season. The Office of Insurance Regulation has 90 days to make a decision on the request, and Allstate has to give policyholders 90 days notice after that.
Universal Insurance Co. of North America, a Sarasota-based insurer that’s been in business at least 25 years, has agreed to cover the displaced Allstate customers if they so choose.

With about 758,000 homeowner policies in Florida, Allstate trails only State Farm and state-sponsored Citizens Property Insurance Corp.

Ryan Priest, an Allstate spokesman, told the Herald that the policy cuts will affect every county in the state.

Tami Torres, a spokesman for the state Department of Financial Services, said it’s a concern any time an insurer decides to drop customers, particularly on the brink of a hurricane season, but the fact that another insurer is willing to pick them up softens the blow considerably.

Meanwhile, Allstate’s 16,000 commercial customers in Florida are mainly small businesses, but also include condominium associations.

Insurance Commissioner Kevin McCarty said the commercial market is strong, so those affected customers should have no problem getting coverage from another carrier.

In the aftermath of last year’s quartet of storms, Allstate already stopped writing new homeowner policies throughout the state. And the insurer hasn’t sought new business in South Florida for years.

Allstate paid out $2 billion in property damage claims from Hurricanes Charley, Frances, Ivan and Jeanne, wiping out all of the profits the company accumulated since Hurricane Andrew struck Florida in 1992, company officials said.

To help pay any hurricane claims this season and next, Allstate has bought $1.6 billion in reinsurance, which basically is insurance covering insurance companies, the company said. The Florida company also has received a $375 million cash infusion from its Northbrook, Ill.-based parent company.