Recent Florida Legislation signed into law by Governor Charlie Crist was a necessary step required to strengthen the stability of the Florida Property Insurance system. Citizens Property Insurance will be allowed to raise Florida home insurance rates as 10% per year until the premiums they charge more closely reflect the risks the company is taking. Private Florida home insurance companies will also be allowed to raise rates to cover the additional reinsurance they are expected to buy in the private market instead of from the Florida Hurricane Catastrophe Fund.
The bright spot is that the Florida insurance system will be on a much stronger financial footing in the coming years if the state can continue the limited hurricane activity it has enjoyed during the past few years – something that has to happen to improve the chances that most Florida home insurance companies can make good on their promise to pay your hurricane claim quickly and fairly.
The bad news is the fact that all of us will be facing up to a 10% increase in Florida homeowner insurance rates. A rate increase of 10% might not sound like much of an increase in other states but in Florida the situation is much different. These increases will be based on higher premiums already in effect after the major rate increases approved after the 2004/2005 Florida hurricanes. Even before the coming 10% increase, consumers in Florida were already paying the highest home insurance rates in the country.
The rate increases could not be coming at a worse time. To begin with, Florida is in the middle of a financial crisis just like the rest of the country with depressed real estate, bankruptcies, foreclosure, and increases in unemployment. These rate increases are going to start happening at the exact same time that State Farm Florida will start cancelling up to 30,000 policies per month as they start exiting the Florida property insurance market. Our subscribers who presently have their insurance with State Farm are telling us that finding comparable coverage with another Florida home insurance company may cost them up to 200% more after they lose their coverage with State Farm.
So what is the bottom line for you as a Florida homeowner insurance consumer as we move through this challenging period?
To start with, you have to understand that even though there are only 40 companies still writing new business, you still have a good chance of locating 5-10 companies from this group that may still be willing to cover your home – even if it is an older home or has close proximity to the coast.
It is very important for you to shop your Florida home insurance policy with more than one independent agent – someone who represents multiple Florida homeowner insurance companies looking for your business. Contacting multiple independent agent will ensure that you are able to get quotes from all the companies in your county who want to cover your home – not just the Florida home insurance companies carried by a single agent.
Also, you have to do due diligence and research on all of the Florida homeowners insurance companies that you are getting quotes from. The 40 companies still willing to write new business vary greatly in terms of their size, financial resources, insurance industry experience, and customer service history. It is important that you ask your agent how each of the companies you are considering is performing in each of these areas.
As you come up with a short list of companies, work with several independent Florida insurance agents and make sure that you have received quotes from all the companies in your county that are interested in covering your home. As you evaluate the quotes, don’t buy the Florida insurance for your home simply on price. Find the right balance of financial stability, outstanding customer service, and the price of the policy. After all, paying a low price for Florida home insurance isn’t really a bargain if the company you pick pays slowly and won’t pay the full amount that you need to repair the damage to your home after a Florida hurricane?
There is little doubt that these recently approved increases in Florida home insurance will be very difficult to swallow and the timing is very bad. However, if you take the time to find all of the Florida home insurance companies that are interested in covering your home, you might be able to fight off all of the 10% increase while everyone else has to pay up. Your research can save you thousands!
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Michael Letcher is a Fortune 500 executive and a licensed Certified Public Accountant. His on-line guide can help you find low cost insurance Florida. Learn the secrets to affordable Florida insurance in his free newsletter at =>
http://www.homeinsurancebuyers.org
Tags: Citizens Property Insurance Corporation, Florida home insurance companies, Florida Hurricane Catastrophe Fund, Florida hurricanes, Florida insurance, insurance Florida, State Farm Florida
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