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Insurers Put on Notice: Homeowners Due Storm Mitigation Credits

September 10th, 2008 by flanews

Some State Farm customers will receive refunds or credits after regulators called the insurer on the carpet for not discounting policies for people who hurricane proofed their homes. As Whitney Ray tells us, the news has other insurance companies checking to see if they owe their policyholders a discount.

Hear it Here: State Farm Refunds Customer, Other Insurers Could Follow

The Office of Insurance Regulation ordered State Farm to shell out 120 million dollars to customers who storm proofed their homes, but never received a discount. Regulators say other insurance companies could owe their policyholders.

To the extent that we find others who are not in compliance we will take action there. We expect all companies to comply with these rules, said Belinda Miller, the Deputy Commissioner for the Office of Insurance Regulation.

Industry experts say insurance companies are trying to play ball, but the rules arent clear. They say the formula used to lower rates caused some problems.

It created some computer problems for a lot of companies and in fact the results of some of the discounts were weird. Insurers would have to pay you for the privilege to offer you insurance, said Sam Miller with the Florida Insurance Council.

State regulators say its not that complicated.

Its a table. You look at the home. You have an inspector do an inspection of the home, certify what mitigation features the home has and its really black and white, what discount is required, said Belinda Miller.

State Farm saw it differently. Now theyre offering refunds. Theyll also pay an extra million to the Florida Insurance Regulatory Trust Fund.

The order comes after regulators shot down State Farms request to raise rates more than 47 percent.

State Farm isnt alone. Allstate and Farm Bureau were also denied increases. Now those companies will be checking to see if they owe customers a discount. The Office of Insurance Regulation is conducting a study to see if any changes are needed to its discounting standards for policyholders who hurricane proof their homes.

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