Allstate is insuring condos in Miami-Dade, Broward and Palm Beach again
.jpg "Allstate is offering condo insurance in South Florida again through one of its subsidiary companies, Castle Key.")
After a 10 year absence, Allstate is once again offering property insurance for condo owners in South Florida again.
The national carrier, one of many that stopped issuing policies in South Florida due to billions of dollars in hurricane-related claims, is writing H06 [Condominium Owners Coverage] policies again.
The company is also following the industry “bundling” trend, offering discounts on your car insurance if you pay for a packaged deal, much like AAA and Geico offer.
The policies are offered by Castle Key, a subsidiary of Allstate formerly known as Allstate Floridian Insurance Company. Castle Key has been writing condo policies in the tri-county area for the last couple of years. But now the company is using the Allstate logo with its mailings and documents.
“Most national and super-regional property/casualty insurers operate numerous underwriting companies depending upon the states they write in,” said Mark Friedlander, spokesperson for the Insurance Information Institute (III), a nonprofit industry research firm based in New York City.
“Castle Key Insurance Company and Castle Key Indemnity Company are subsidiaries of Allstate Insurance Company and are the primary providers of personal lines property insurance in Florida for the Allstate group,” Friedlander said. “Regardless of the underwriting company name, the products Castle Key provides Floridians are Allstate insurance products and offered through local Allstate agents.”
Most single-family home owners in South Florida, however, are still left with one option: Citizens Property Insurance, a not-for-profit, tax exempt government entity, created by the Florida Legislature in 2002, to offer insurance for qualifying single-family home owners.
“A company like Castle Key is probably doing what other domestics are doing: Spreading their risk,” said Michael Peltier, media relations manager for Citizens. “These companies will have policies on not just condos on the beach in Miami but also multifamily buildings in Gainesville or Pensacola,” he said.
That diversity allows the smaller company to use funds from its other properties around the state to pay hurricane claims in South Florida without going bankrupt or impacting Allstate’s bottom line.
Allstate was the fifth-largest insurance agency in the U.S. in 2020. The company wrote direct premiums worth $35 billion, according to InsuranceBusinessMag. State Farm was No. 1, with $65.6 billion in direct premiums written.
Just because Castle Key is a smaller company, though, doesn’t mean you shouldn’t expect Allstate-sized rates.
“We’re seeing the regional carriers increasing rates as high as 25% at renewal,” said Gayle Bainbridge, a founding partner at the Miami-based Global Risk Insurance Solutions. “It’s not unusual to see a 15% increase in yearly renewals. The carrier doesn’t have rates adequate to cover the claims, so they have to be solvent. Even when the storms don’t hit us, like when Irma went up the coast, the insurance companies look at that and go ‘Oh my goodness, that could have been us.’
“For now, these smaller insurers will write condo policies for three or four years,” Bainbridge said. “If it’s profitable, you could see the big companies returning to South Florida.”
This story was originally published December 11, 2020 at 1:47 PM.
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