Posts Tagged ‘Florida home insurance crisis’

Florida Newspapers – The Final Death Blow?

January 5, 2010

I’ve had a unique front row perspective as the Florida newspaper industry has continued its reorganizations and consolidation as I’ve had the chance to work with newspaper business reporters across the state covering the homeowners insurance crisis in Florida.

Over this period, I’ve established great relationships with eight business reporters who have ultimately lost their jobs in restructurings or seen their hours cut from full to part time.  It’s been a real eye opener for me.

Both in Florida and nationwide, newspaper companies continue to struggle with debt, Chapter 11 filings, layoffs, and mergers.  This multi-year downward trend has been blamed on everything from debt levels to liberal bias in the print media.  As I’ve operated my own consumer organization and managed my own real estate portfolio I’ve had some surprising experiences with the newspaper print media.

In September of 2008, I lost a tenant that had been renting a home that I own in Port St. Lucie Florida.  In prior years I had taken out newspaper ads that ran about $150 for a two week period that had some limited success attracting prospective tenants.  This time I didn’t bother.  Instead I purchased ads on multiple on-line websites that ran for about one month for about the same price as newspaper advertising.  Those ads didn’t work either.  My tenant ultimately came from a free ad I placed on Craigslist.  There is little doubt that newspapers have lost huge amounts of paid advertising to on-line websites – and specifically to Craigslist.

My consumer website for Florida home insurance is another case study that outlines both the circulation and readership declines that Florida newspapers have experienced.  As my site was launched I was very pleased with the newspaper coverage I obtained and the relationship I built with the business reporters at each newspaper.  There were times when even a full feature story on the front of the business section in certain newspapers resulted in disappointing traffic to the website.

Even though the reporters did an excellent job on the story, my thoughts were that some of these Florida newspapers had circulations that were far below the published estimates.  And the customers of the newspapers who actually read them was even lower.  After these disappointing results I could only think of two things – first a sense of relief that I hadn’t paid for a full page ad in this newspaper, but more also a much more important questions:  What do I have to do to reach my customer base?

Each of the examples above highlight three major problems faced by Florida newspapers – competition from on-line ads, declining circulation, and even less actual readership.  And these areas don’t even begin to address the quality of the content in the newspapers.

One thing I’ve noticed as these Florida newspapers continue to consolidate is a lot less coverage of the Florida home insurance crisis.  Most of the eight newspaper business reporters I’d worked with in the past had been covering the topic for years and were experts on the subject.  Some of the newer reporters now covering this area were being asked to do this on a fill-in basis and it takes a lot of time to learn a complicated topic like Florida home insurance.  Even after the new business reporters are fully up to speed, there are now a lot less space available in the paper itself to cover this topic.  That will give public officials sort of a free pass because there won’t be as much scrutiny of the policy decisions they are considering.  The on-line news media still standing won’t give state public officials the same scrutiny that these newspaper business reporters did.

Which leads me to the final question:  “How do businesses reach their customers in a world where Florida newspaper circulation and readership continues to decline?” Newspapers have plenty of company as far as media companies are concerned.  Unless you have a budget capable of reaching a national television and radio audience, getting the message out to your customer base is becoming increasingly difficult.  Even home town radio and TV stations are facing difficult times.  A portion of the challenge comes back to a simple fact – our lives are so fast paced that the only thing just about all consumers look at during a typical day is the home page on their web browser.

The ongoing trend of consolidating Florida newspapers and the difficulties faced by other types of media means only one thing to small and medium sized organizations.  A new way to reach your customer base that includes multiple delivery methods will be vital to your success.  Traditional media outlets just won’t get the job done in today’s rapidly changing business environment.


Michael Letcher is a Fortune 500 executive and a licensed Certified Public Accountant.  His on-line buyers guide can help you find affordable options to State Farm Insurance Florida.  Find out the secrets to low cost Florida insurance for homes in his free newsletter at =>


Get Cheap Florida Home Insurance in a Confusing Market

January 2, 2010

The Florida home insurance crisis just won’t go away.

Even though Florida has been mostly hurricane free the past three years, new clouds are forming on the horizon as many Florida insurance companies may look to raise rates.  And if they don’t get the rates that they want, you should expect them to start dropping and cancelling policies again.

State Farm Insurance Florida is leading the way on this.  After Florida recently rejected the company’s 47% rate increase, State Farm Insurance FL  is appealing that decision in court.  You should expect other companies to follow the lead of State Farm Florida.

Prior to Hurricane Andrew in 1992 it was easy to find homeowners insurance in Florida.  It was simply a matter of picking up the phone book and calling your nearest agent.  There were hundreds of companies who wanted your business.

That kind of Florida property insurance market is long gone – replaced today by a dysfunctional market where less than 40 companies are actively writing any new business at any time in the state.  And unlike the old days where companies had large surpluses and deep multinational parents to help absorb hurricane claims, most of the home insurance companies still active in the market are very small, Florida based companies.

Many of these Florida based companies just opened their doors for business during the past three years.  As a result, there is a lot of concern about many of these companies being undercapitalized and lacking in post hurricane claim processing experience – a potentially lethal combination that could lead to long delays in getting claims paid after a Florida hurricane.

In this brave new world of smaller, newer, lightly funded Florida home insurance companies, shopping for insurance the old way just won’t work anymore.  As a smart shopper, you have to change the way you shop for insurance to be successful in today’s Florida property insurance market.

Here’s how you can be a smart consumer and find affordable Florida home insurance:

Don’t use a captive Florida insurance agent that only represents a limited number of companies.  Instead use an independent agent that represents multiple companies that will allow the agent to present you with many options.

Don’t work with only one independent agent.  Work with several.  Why?  Because a single agent doesn’t represent all of the companies still writing new business in today’s Florida insurance market.

Find out the names of the Florida home insurance companies that use a general agent or write policies directly without using an independent agent network.  This is significant because some companies have cut costs by eliminating insurance agent commissions.  If you pursue this, make sure you are familiar with every line of coverage on your current policy because you won’t have the benefit of the personalized service of an independent agent.  You’ll have more choices this way, but you will be on your own.

Find out the financial ratings of each of the companies you are considering.  Don’t select a company solely based on a lower price.  You have to find out how much surplus each company has on hand to pay their claims when they happen.

Ask your agent about the company’s risk diversification.  How many policies does the company have in Florida?  Where are their policies situated?  How are they distributed across the State of Florida?  Are they reasonably spread out across the state or are they primarily located in the hurricane prone areas of South Florida?

Find out the number of years the company has been in business, and whether they have any prior experience with Florida hurricane claims.  You don’t want your claim to be “on the job training” for a brand new company.  Check with your agent to find out the history of complaints filed against the company.

In this market, your goal is to create as much competition for your policy as possible.  After you’ve received quotes from multiple agents and companies its time to narrow the field.  Don’t make your decision on price alone.  Make sure the coverage from multiple companies is identical.  After you’ve looked at the coverage, narrow the field further based on the financials and customer service history of each company.

Give serious consideration to paying more for a policy from a company that has more surplus, stronger financials, has been in business longer, and has fewer complaints in its history.

Last but not least – don’t allow your policy to be placed in Florida’s state run carrier of last resort – Citizens Property Insurance Corporation unless you’ve exhausted all of your private company options.

By following these steps you’ll create competition for your Florida homeowners insurance policy and you’ll be getting the most that you can for your insurance dollar.


Michael Letcher is a former Fortune 500 executive and is a licensed CPA.  His on line guide can help you get affordable South Florida homeowners insurance.  Find out the secrets of the Florida property insurance market in his free newsletter by visiting =>