Frequently Asked Questions
Consent to Rate
Q: What is “Consent to Rate”?
A: The Florida Office of Insurance Regulation (OIR) is responsible for approving rates charged by the state’s insurance companies. Sometimes, insurance carriers must charge more than the approved OIR rate, based on a home’s underwriting risk and other factors. Consent to Rate is a form used by insurance companies to request permission from a policyholder to increase their homeowners insurance rate above the rate approved by the OIR. By signing a Consent to Rate form, a policyholder allows their insurance company to increase their homeowners insurance rates above the rates approved by the OIR.
Q: Why do insurance companies use Consent to Rate?
A: Insurance companies may use Consent to Rate when they can no longer offer the same coverage at the current rate. All carriers are eligible to use Consent to Rate for up to 5 percent of policies in force. The forms are filed and are public information. The rates are specific to each risk and only available to that policyholder.
In Florida, homeowners are experiencing sharp increases in property insurance rates due to the rising costs carriers face caused by Assignment of Benefits fraud, Hurricane Irma claims, and reinsurance costs (see Why Is Florida Homeowners Insurance Going Up? for more information). Consent to Rate allows an insurance company to charge higher rates than a filed rate—with the policyholder’s approval.
Q: Who is eligible for Consent to Rate?
A: Consent to Rate is eligible for policyholders who have been non-renewed due to reinsurance costs.
Q: How is the insured notified of their eligibility for the Consent to Rate program?
A: A non-renewal notice is issued to the insured 125 days before the expiration of the policy. If the policy has an expiration date of June 1, 2021 or later and is eligible for the Consent to Rate renewal offer, correspondence will be sent to the policyholder during the first week of the month following the date the non-renewal was issued. It will include a cover letter and the Consent to Rate Form, which specifies the new proposed agreed excess rate (Final Premium).
Q: Where can I locate the Consent to Rate Form?
A: A standard template of the form and cover letter will be provided to all agents via email. However, the Consent to Rate details of each policy will be listed in the PTS Note titled, “Non-Renewal with Consent to Rate Option.” For a copy of the Consent to Rate form the agent may request it from underwriting via phone, email, or chat.
Q: What should I do if the policyholder receives a Consent to Rate letter?
A: The insured should read the letter carefully. Review the policy, deductible, and amount of coverage with the insured. Before the insured agrees and signs the consent to rate form, we recommend seeing if you can find a policy at a lower premium. Once the insured signs this form, they accept the responsibility of paying a higher premium than what was filed with the OIR. However, if you cannot find insurance coverage in the open market at the current filed rates, the insured may want to sign the required Consent to Rate form to secure renewal coverage.
Q: What Is the Consent to Rate premium amount?
A: Each policy eligible for Consent to Rate will have the premium amount listed in the PTS note, as seen below:
Q: Why are both the renewal premium and Consent to Rate premium listed in the PTS note?
A: We are required to list both premium amounts in the Consent to Rate form mailed to the insured. In order to be prepared to answer questions, both the renewal premium (what we are not offering because reinsurance costs are too high) and the Consent to Rate premium (the rate that is covering the reinsurance costs) are listed in the PTS note.
Q: The insured wants the Consent to Rate premium. What are the next steps?
A: To accept the agreed excess rate, the insured must sign and return the form before the expiration date to People’s Trust Insurance via email at firstname.lastname@example.org or to PTI’s mailing address with “Attn: Underwriting.” The forms will be reviewed during our normal business hours (Monday through Friday, 9am – 5pm). If the form is received outside of the normal business hours and the coverage will expire outside of the normal business hours (i.e. during the weekend), the policy must be placed elsewhere to secure coverage for your client. The form is reviewed by underwriting management (allow 48 hours) and once approved, a renewal offer with the Consent to Rate premium will be released within 1 business day to the insured. For insured billed policies, a renewal payment must post to the policy before the expiration date of the policy. Once the policy expires, the Consent to Rate offer expires as well. Postmarked dates cannot be honored and exceptions cannot be made. To be safe, the form should be returned with ample time to be received and processed.
Q: What if the renewal expiration date has already passed?
A: We cannot offer the Consent to Rate if the expiration date of the policy has already passed. The policyholder will need to secure coverage with another carrier. It is important to note, that we cannot honor a postmarked date, the form will need to be received and processed before the expiration date.
Q: How long will processing the Consent to Rate form take?
A: The expected processing time is no greater than 48 business hours.
Q: Who needs to sign the Consent to Rate form? Is eSignature accepted?
A: Only one named insured needs to sign the Consent to Rate. Yes, the insured(s) can sign the form through eSignature.
Q: If the insured accepts the Consent to Rate offer, will Consent to Rate apply to future renewal terms?
A: No, the Consent to Rate offer is for the 2021-2022 renewal term. Reinsurance costs are reviewed annually and if the policy is affected in a future term, it would be determined at that point and the insured will be notified.
Q: Is a policyholder still able to make endorsement changes to their policy?
A: An endorsement can be processed on the current term. However, in order to process an endorsement on the 2021-2022 term the Consent to Rate offer must first be accepted and processed by underwriting.
Yes. If the endorsement request is premium bearing, the Consent to Rate premium will change to reflect the requests. Policyholders may attempt to lower coverages to reduce the additional premium from the Consent to Rate; it is important to note that Coverage A still needs to be within the RCE range approved by underwriting and all coverage change requests must be reviewed by the appropriate authority level, as usual.
Q: If the insured accepts the Consent to Rate offer, will the renewal declaration page and documents look the same?
A: Yes. The Consent to Rate will appear as the total premium amount on the renewal Declaration Page.
Q: How did PTI determine the Consent to Rate premiums?
A: Through the industry-accepted Hurricane models from AIR and RMS. These models are approved for use by the OIR.
Q: Is Consent to Rate legal? Is it filed? Is it public information?
A: Yes, all carriers are eligible to use Consent to Rate for up to 5 percent of policies in force. The forms are filed and are public information. The rates are specific to each risk and only available to that policyholder.