Private insurance companies are lining up to request state approval of two key policy revisions intended to reduce losses from a practice called “assignment of benefits.”
In late March, the state Office of Insurance Regulation approved requests by Citizens Property Insurance Corp. to limit the cost of emergency repairs after water breaches or other emergencies to $3,000, and to bar permanent repairs from commencing before Citizens has an opportunity to inspect the damage.
Over the past three weeks, 11 other insurance companies have requested approval of the same revisions. They are Federated National, Florida Family, Safepoint, Prepared Insurance Co., Security First, Homeowners Choice, Monarch, Anchor, Southern Oak, American Traditions and Modern USA.
Locke Burt, president of Ormond Beach-based Security First, said assignments of benefits drive up claims costs by about $10 million a year at his company. Those costs are passed on to policyholders as rate increases, he said. His company is seeking an average statewide increase of 4.9 percent for new and renewing policies beginning June 1.