On July 24, 2009, State Farm filed a request with the OIR to eliminate and reduce various discounts in its rating plan for homeowners insurance. State Farm proposed to eliminate or reduce discounts for hurricane shutters and other efforts by homeowners to mitigate hurricane damage, as well as for other consumer discounts for longtime policyholders, claims-free policyholders and policyholders with multiple policies with State Farm. The OIR approved the elimination of those discounts not required by Florida law (i.e. consumer discounts), but refused to approve changes eliminating discounts for hurricane mitigation efforts.

“Because of this elimination of consumer discounts, the OIR has claimed that this would result in a 5 to 20 percent increase to State Farm premiums overall,” said Commissioner Diaz. “My concern is that other insurance companies will try to follow suit and eliminate discounts for hurricane mitigation efforts, creating higher insurance premiums for homeowners across Miami-Dade and the state. Homeowners who do their best to secure their property in the face of a hurricane should be rewarded by their insurance company, not punished.” 

It is estimated by the OIR that hurricane mitigation discounts result in an average of another 13 percent reduction in homeowner insurance policyholder’s premiums. Florida law currently requires property insurers to offer discounts for hurricane mitigation, but the law gives insurance companies leeway to reduce their mitigation discounts after doing their own mitigation studies.

“Hurricane mitigation discounts provide a meaningful incentive to homeowners to install hurricane shutters and make other efforts to protect homes from hurricanes,” said Commissioner Diaz. “Without that incentive, we risk more damage during natural disasters that could be prevented through these precautions.”

Commissioner Diaz’s resolution also asks Governor Charlie Crist, and the State Cabinet and Legislature to continue to keep hurricane mitigation discounts in place. 

For more information, please contact Commissioner Diaz’s office at 305-599-1200.