News & Resources

After discussing market considerations in setting insurance rates, we turn to recent activity in Congress. As you recall from our last two posts, insurance companies are required to set rates based on risk and loss expectations, not on supply or demand issues. Florida regulators maintain that insurance companies are increasing premiums because they can, not because they have to: Insurers realize that there is very little competition in some parts of the state and that they have, pardon the insurance pun, a captive audience.

In December 2014, the Consumer Federation of America raised some questions about how Allstate was calculating auto insurance premiums. The CFA alleged that Allstate was basing those premiums on “marketplace considerations.” These marketplace considerations focus on competition and supply and demand — factors that in most industries would certainly influence price.

Florida consumers may not realize it, but a heated discussion is brewing between their property/casualty insurance companies and the state’s Office of Insurance Regulation. The subject is price optimization, and the OIR recently reminded p/c insurers that state law prohibits its use.

After an accident, no one wants to spend time fighting an insurance company. If you are injured, you want to focus on getting better. If your property is damaged, you just want it fixed so you can move on with your life. If you have lost a loved one, you need time to mourn and to adjust to the abrupt change in your life.