Add Homeowners Choice to the tally of property insurance companies receiving a double-digit rate hike.
The Clearwater-based company, which has about 70,000 homeowners policies, said Friday it has received regulatory approval to raise premiums an average of 14 percent. The increase is effective for policies written or renewed on or after April 10.
Homeowners Choice chief executive officer F.X. McCahill, said the company has kept premiums steady since it was founded three years ago. However, the company has been forced to pay more for reinsurance — an added layer of insurance that insurers buy to protect themselves from catastrophic claims.
"Like all others in the industry, we have been impacted by rising reinsurance costs. We have held the line as long as possible, but now find a rate increase necessary," he said.
Florida Insurance Commissioner Kevin McCarty has approved a string of recent rate increases to reimburse insurers for both reinsurance costs and lower premiums. Insurers have complained that premiums have fallen because of a state-mandated program giving credits to homeowners who shore up their homes against hurricanes.
Part of the state's plan to help Florida's troubled property insurance market hinges on Florida-based companies like Homeowners Choice to taking on more policies even as out-of-state insurers pull back. And Homeowners Choice has been eager to grow quickly.
In October, Homeowners Choice received approval to gradually take about 60,000 policies out of state-run Citizens Property Insurance. At the time, Homeowners had 53,000 policies. It also made a failed bid to buy fellow insurer 21st Century Holding Co.