State Farm Florida Insurance Co., Florida's largest home insurer, has been given approval to increase homeowners policy rates by an average of 8.6 percent for 2006 across the state.

The insurer could raise premiums for some customers by as much as 40 percent in Broward County, 35 percent in Palm Beach County and 37.9 percent in Miami-Dade County. The Office of Insurance Regulation made the ruling on November 22.

The increase is mainly due to higher costs of non-hurricane claims and the rising price of building materials, said Joe Soto, State Farm Florida spokesman.

"There's a lot of other factors that affected (rates)," Soto said. "It wasn't just hurricanes."

The new rates will take effect Feb. 1 for new policies and April 1 for renewals.

Then after the unprecedented 2004 hurricane season which saw four major hurricanes cut across Florida, State Farm raised rates an additional 5 percent.

Steve Burgess, state insurance consumer advocate, questioned some of the insurer's requests for higher premiums for 2006.

"I'm inclined to say that I'm disappointed that they granted them the total amount of the increase that (State Farm Florida) asked for, because I thought we asked them very credible issues that they should have taken into account," Burgess said. But, the Florida Department of Financial Services said State Farm's rate increase is unfair.

There is concern that this will have a big impact on consumers, said Alina Torres, of the State Department of Financial Services. There doesn't seem to be a need for this increase at this time.

The state's third largest home insurer, Allstate Floridian, said Tuesday it was appealing a decision to deny its proposed increases.

The company had requested average statewide increases of 16.3 percent, and 24.4 percent for customers covered by the company's Allstate Floridian Indemnity Co. subsidiary.

Last month, state Insurance Commissioner Kevin McCarty told Allstate Floridian that his office was rejecting its proposed increase because the company did not provide assumptions for catastrophe models the insurer used in its rate request.

"We understand this (rate request) is not popular, but it's necessary," Allstate Floridian spokesman Ryan Priest said. "... We're still adamant that that is a rate that is actuarially justified and appropriate."

Last updated Apr. 4, 2006