Florida insurance regulators are working with insurers to provide consumers with credits on business and auto insurance policies as a result of the economic disruptions created by the coronavirus situation.
The efforts by the Florida Office of Insurance Regulation (OIR) come at the same time that the Consumer Federation of America (CFA) has been urging state insurance commissioners across the nation to order premium relief in the wake of unprecedented layoffs and small business closing during the Covid-19 pandemic.
“We urge you to take action on key P&C (property and casualty) insurance consumer protection issues arising from Covid-19 and federal and local government responses to the pandemic, particularly excessive premiums being charged to individuals and businesses for lines of insurance that base rates on factors such as miles driven, payroll and receipts,” a March 30 CFA letter to insurance commissioners states.
The call for rate reductions comes at a difficult time for Florida insurers, which have been facing increased litigation costs and continuing financial pressures due to their responses to hurricane damage in recent years. Some property insurers had sought double-digit rate increases prior to the coronavirus situation, and industry observers expect some Florida companies to see downgrades to their financial ratings this year.
Florida regulators said they have encouraged insurers to adjust premium rates in the short term to help consumers weather the current economic disruption.
“The Florida Office of Insurance Regulation is absolutely committed to assisting consumers during this time and has taken significant action in response to Covid-19, including issuing guidance to insurers encouraging them to be flexible with premium payments,” Alexis Bakofsky, OIR’s director of communications, told the Florida Record in an email.
Several insurers have contacted OIR to say that they will temporarily provide premium credits during the current emergency, according to Bakofsky.
“OIR will continue to work with insurers to implement these premium credits to provide immediate benefit to Floridians,” she said.
The agency has pledged to work with Gov. Ron DeSantis, Chief Financial Officer Jimmy Patronis and the Florida Cabinet to help residents negotiate financial hurdles during the pandemic.
“I am encouraged by the steps insurers have taken to serve their policyholders at a time consumers need them most,” Florida Insurance Commissioner David Altmaier said in a statement emailed to the Record. “OIR is actively working with insurers to respond to Covid-19 and assist Floridians at each step.”
Because the time frame of premium adjustments affecting Floridians will be limited and related to the pandemic, rate filings with the OIR will not be required.
Michael Carlson, president and CEO of the Personal Insurance Federation of Florida, said PIFF members have pledged to help out customers as they deal with the current stay-at-home order.
“PIFF member companies, including State Farm, Allstate and Progressive, have given substantial financial help to the auto customers,” he told the Record in an email.
Carlson also pointed out that Farmers Insurance has moved to help its small-business commercial customers. Farmers just announced that it will provide relief to more than 115,000 of its business insurance customers nationwide, with restaurant, retail and service companies expected to get a 20 percent monthly credit on their premiums over the next two months.
Farmers has also relaxed payment due dates, according to a news release.
Meanwhile, Allstate auto insurance customers will receive a 15 percent rebate for the months of April and May, that company announced.
Nationwide, auto insurance companies will return $10.5 billion to their customers to help them deal with the coronavirus situation, the Insurance Information Institute reported this weekend.
While the CFA has applauded companies such as Allstate and American Family for rebating hundreds of millions of dollars in premium costs, the federation sees the response by insurers as uneven. Some have not reduced rates, and state insurance commissioners are often unwilling to mandate actions to prevent excess charges, the federation said in a news release.
“While some (state) commissioners are starting to develop responses to the dramatically reduced mileage and reduction in accident claims, consumers need regulators to step in and to make sure the refunds and credits are sufficient and fair,” Doug Heller, a CFA consultant, told the Record in an email.
The CFA has said it will release additional information about how insurers are responding to the COVID-19 situation in the week ahead.