Nationwide’s efforts to greatly increase homeowners-insurance premiums in hurricane-prone Florida have been denied.

Insurance regulators in that state rejected a request by the company to increase rates by an average 71.5 percent.

Kevin McCarty, Florida insurance commissioner, said there was not enough evidence to justify an increase of that size. He also cited concerns that the proposal would increase premiums by 300 percent to 400 percent in some areas.

Nationwide spokesman Joe Case said the rate request "reflects the cost of doing business in Florida," because of rising costs of reinsurance, labor and building supplies.

Nationwide now is reviewing its options, Case said, which could include filing for a smaller rate increase or appealing the regulators’ decision.

The Columbus-based insurer isn’t the only company to seek significant rate increases after the active hurricane seasons of 2004 and 2005.

Florida regulators recently approved State Farm’s request for an average increase of 52 percent. Allstate has raised rates about 24 percent.

"The fact of the matter is that Florida is the most risky place in the U.S. to live and own a house, and insurers need to be able to earn a return for the substantial risk they are taking on by writing policies there," said Robert Hartwig, chief economist with the New York-based Insurance Information Institute.

Insurers in Florida have not made a profit in years, Hartwig said. Since 1992, homeowners-insurance companies in Florida have lost $13 billion.

Last year, Nationwide was granted a 21 percent rate increase in Florida. Soon after, the company said it would not write any new homeowners-insurance policies in the state and would not renew 25,000 homeowners-insurance policies and 4,800 mobile-home policies.

Nationwide has about 253,000 homeowners-insurance policies in Florida.

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Denise Trowbridge
THE COLUMBUS DISPATCH

dtrowbridge@dispatch.com

©2006, The Columbus Dispatch