Windstorm coverage could rise by an average of 100 percent statewide, possibly affecting up to 27,000 Suncoast residents.
Coastal homeowners in Pinellas, Pasco and Hernando counties could see windstorm insurance rates climb significantly over the next several years.
An arbitration panel on Thursday approved a series of actions that could increase windstorm insurance rates by an average of 100 percent statewide.
The panel sided with the Florida Windstorm Underwriting Association, which provides insurance to 450,000 coastal homeowners in Florida, and overruled Insurance Commissioner Bill Nelson, who opposed the increases.
The largest rate increases likely will be seen in South Florida, which is most prone to hurricane damage. But roughly 27,000 homeowners in Pinellas, Pasco and Hernando counties also could be affected by the rate increases.
The windstorm association argued it needs the increase to pay claims and remain financially stable. But Nelson said the rate increases are exorbitant and that the computer models used to justify the increase are invalid.
After his objections were overruled 2-1 by a three-member arbitration panel Thursday, Nelson reiterated his objections and called for an end to the arbitration system.
"This is the Armageddon we've been predicting under an arbitration system that allows companies to go around the people's elected commissioner," Nelson said in a press release.
The rate proposal has been in the works for nearly a year.
The windstorm association is a state-run agency that provides windstorm coverage to Florida property owners who cannot get coverage from private insurers.
The association announced its plans for the rate increase in March. The plan includes several opportunities for discounts if homes are well-built or if homeowners shore up houses to better withstand windstorms.
To ease the blow, the association is limiting policyholder premium increases to no more than 20 percent in the first year, 30 percent in the second and 40 percent in subsequent years.
The association released an example of the increase, describing a $150,000 home in South Florida that would experience a $14-per-month increase in the insurance rate the first year, a $27-per-month increase the second year, and a $47-per-month increase in the third year.
The rate increases are based on the sturdiness of homes and their locations.
The greatest increases are expected in South Florida. Despite the green light for the rate increases, homes in some areas could experience decreases in rates.
Early estimates indicated that some Pinellas County homes could see their rates decrease by 13 percent, while others could see a 53 percent increase.