USAA Asks To Raise Its Premiums 40%
Published: Aug 12, 2006
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USAA, Florida's fourth-largest homeowners insurance writer, filed Friday for premium increases averaging 40 percent, becoming the latest insurer to announce significantly higher rates.
State insurance regulators have 90 days to consider the increase for the company's Florida policyholders, including more than 45,000 in the Tampa Bay area. If regulators do nothing, the rate increase automatically goes into effect.
"USAA is extremely cautious about raising rates," said spokeswoman Lynne McChristian. "It takes us awhile."
If approved by regulators, it would be the company's second rate increase within a few months. State insurance regulators have approved an 8 percent rate increase that's scheduled to go into effect for policies renewing on or after Sept.1.
USAA wants the 40 percent increase to go into effect Jan. 1.
McChristian said USAA has experienced major increases for reinsurance (coverage that insurers buy to protect against catastrophic losses) and in the cost of construction to replace damaged properties. Another consideration has been Florida's vulnerability to hurricanes. McChristian was unable to provide specifics as to how USAA costs have gone up.
San Antonio-based USAA, which is open to members of the military and their families and dependents, covers 280,000 policyholders in Florida through two companies, the parent, United States Automobile Association and the USAA Casualty Insurance Co.
In the past, USAA customers have paid among the lowest rates in the state, but good deals are increasingly becoming a thing of past as Florida homeowners wake up to a new insurance reality.
Most major insurers have raised rates in recent months, including the three biggest: state-sponsored Citizens Property Insurance Corp., State Farm Florida Insurance Co. and Allstate Floridian Insurance Co.
The last major rate increase approved by regulators was 52.7 percent for State Farm last month. State Farm originally wanted a 79 percent increase, but regulators reduced the amount in an agreement with the company.
Reporter Randy Diamond can be reached at (813) 259-8144 or
