Florida regulator explains why insurance rates aren't dropping
Published: Monday, August 12, 2013 at 11:00 a.m.
Last Modified: Monday, August 12, 2013 at 11:48 a.m.
TALLAHASSEE — Florida's insurance commissioner is trying to explain why homeowner property insurance rates aren't coming down.
Kevin McCarty on Friday responded to one of his bosses about insurance costs. Chief Financial Officer Jeff Atwater last week asked why rates weren't coming down since the cost of reinsurance has dropped 15 percent to 20 percent.
Insurers purchase reinsurance to provide financial backing in case of major claims.
McCarty says that in some cases insurers are purchasing additional reinsurance instead of passing on the savings to homeowners.
He also says that there hasn't been enough time for insurers to reflect the savings in their rates. McCarty says most reinsurance contracts start on June 1.
McCarty says some insurers have indicated they plan to reduce rates in some parts of the state.