Over the past several years, consumers in the state of Florida have faced slightly higher insurance rates on both their home and auto insurance policies, due to what has been referred to as the state’s “hurricane tax.” Fortunately for residents, that tax is now slated to go away next year, well ahead of schedule. That might likewise be a good sign for insurance agents, who get to deliver the positive news to consumers that their insurance costs are going down.
The hurricane tax added a 1 percent surcharge to all home and auto insurance policies for years, as a means of helping to pay off money it borrowed to distribute claims money to consumers battered by a series of hurricanes several years ago, according to a report from the Associated Press. But it seems that all these additional levies – which, to be fair, cost some homeowners in the state as much as an additional $1,000, regardless of whether they were through the state’s Citizens Property Insurance program – have added up more quickly than expected. The charges are now slated to come to an end in July of next year, well before the previously planned 2017 end date.
Why is this happening?
The reason for this unexpected change is actually pretty simple: The original projections took into account a concern that Florida would be hit by another major hurricane in the time between 2007 – when the surcharge was instituted – and now, and that just hasn’t happened, the report said. With nothing to really pay out on a substantial level, the program ran a surplus.
This news comes on top of a previous, and similar, decision from state regulatory officials, which removed another surcharge of 1.3 percent from consumers’ auto and home insurance bills, the report said. In fact, that one will be removed from policyholders’ bills in January.
Insurance agents might want to take this time to remind consumers just how beneficial having such coverage is, and also try to help them find additional discounts that could further save them money. Studies show that discounts are viewed very favorably by consumers, but surprisingly, not as much as the ability of an agent to provide high-quality customer service. As such, those who can do both will likely keep their clients as happy as possible, and likely hang onto sky-high retention rates.