Two Home Insurers Eye Rate Hikes Of More Than 50% in Florida

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Castle Key Indemnity Company and Amica Mutual Insurance hope to raise homeowners insurance rates in Florida by more than 50%.

Castle Key, a subsidiary of Allstate, has proposed increasing rates for Florida condominiums by 53.5%, an Allstate spokesperson told Kiplinger in an email.

Amica, which provides coverage on properties including vacation rentals, has proposed raising home insurance premiums by 54.1%, according to local news network WESH 2.

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Castle Key's rate increase requests were filed with the Florida Office of Insurance Regulation in March 2023, and the increases began to be rolled out to customers in May 2023, the spokesperson said. That said, this is not a new proposal to raise the condo rates, he said, adding that the rates have already increased for a majority of customers.

An Amica spokesperson told Kiplinger in an email that the increase is on its dwelling policy line of business, which often covers secondary residences or rental properties, and does not apply to standard home policies.

"The rate increase is necessary to restore pricing adequacy for this product," the Amica spokesperson said. "Amica remains committed to providing excellent products and services to our customers at competitive rates."

More frequently severe weather, higher repair costs and elevated reinsurance premiums are behind rate increases in many states, including Florida, the Allstate spokesperson said.

“The cost of providing reliable protection for Florida properties has risen dramatically, and we’re taking actions to ensure we can protect customers over the long haul,” the Allstate spokesperson said. “We’re committed to the state of Florida and confident recent insurance reforms will address long-standing challenges in the state.”

Florida's home insurance problem

The average cost of home insurance in Florida is $4,218 per year, which is about 52% higher than the national average of $2,777, according to Insurance.com.

Catastrophic natural disasters in the state that caused reinsurance rates to skyrocket have led to several insurers restricting coverage or abandoning the state entirely. Last year, for example, Farmers Insurance announced plans to withdraw auto, home and umbrella policies in Florida, while AAA said it would no longer renew certain auto and home insurance in the state.

“If you're taking hits to your bottom line in these marketplaces, you're just gonna go, ‘We're out,’” M. Thomas Martin, president of the Homeowners Consumer Center, told Kiplinger last year.

There are many factors that affect homeowners insurance costs. For ways to help save on these costs, experts recommend getting quotes from multiple insurers, considering raising your deductible and bundling your home and auto insurance to get the cheapest rate possible.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.