Posts Tagged ‘Florida insurance’

Florida Home Insurance Rate Increases – Can You Avoid Them?

January 3, 2010

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

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Florida Homeowners Insurance – Want to Pay Someone Else’s Bill?

January 3, 2010

Since Hurricane Andrew in 1992, Florida home insurance companies have continued to pull out of the state or seek significant rate increases.  Why?  Because the companies and state regulators can’t agree on the appropriate Florida homeowners insurance rates consumers should pay for the hurricane portion of their bill.

As a result, beginning in the 1990’s, Florida started to impose special assessments on every Florida homeowners insurance policy issued and created a state run insurance company of last resort that is called Citizens Property Insurance Corporation to ensure that everyone in Florida can get home insurance coverage for their home.

Florida also created The Florida Hurricane Catastrophe Fund which requires all licensed Florida homeowners insurance companies to buy reinsurance after the losses from a major hurricane reach a certain level.  This find serves as insurance for Florida home insurance companies and is designed to ensure that the companies don’t have to absorb all of the costs of a major hurricane event directly.

Finally, Florida created a legal entity called the Florida Insurance Guaranty Association (FIGA) that will pay your insurance claim if your Florida homeowners insurance company is declared insolvent.

Those special assessment line items on your Florida home insurance bill can cause you to pay line item charges for many years into the future.  You can be required to make up the difference when Citizens Property Insurance Florida and the Florida Hurricane Catastrophe Fund can’t meet their obligations.  Or you could be assessed for the difference if FIGA doesn’t have the cash to pay off the claims filed against a Florida homeowners insurance company that became insolvent.

So far, at high level, each of these various entities and the protections that they offer make sense.  And when they work properly they do help further diversify Florida’s hurricane risk and help make it attractive for Florida home insurance companies to continue to do business in the state.

However, the Florida Insurance Laws passed in 2007 and 2008 have altered and politicized the goals of each of these entities to a point where they no longer function as originally intended.  Why?  Because Florida legislators aren’t willing to tell voters the truth – that these entities are now seriously underfunded and not positioned to do what they are supposed to do.  Even worse, many Floridians don’t know that they are subsidizing the Florida home insurance premiums of someone else.

Presently, both the Florida Hurricane Catastrophe Fund and Citizens Insurance do not have enough money and are overly dependent on an unfriendly bond market to satisfy their responsibilities.  Both organizations have to borrow before Florida hurricanes happen with limited success to come up with the money they need – and they are coming up short in the bond markets as the country continues to work through the financial crisis.

Citizens Property Insurance Corporation is the one organization that causes each of us to subsidize the Florida insurance costs of someone else.  Every one of us will be required to pay annual special assessments for many years into the future to cover the cash shortfalls that Citizens Property Insurance had as a result of the 2004/2005 storms.  Cash shortfalls are just another way of saying that those who were insured with Citizens for the 2004/2005 storms, were simply not charged enough premium for that coverage.  Many of those homes are older homes that are located in areas of Florida that are the most susceptible to hurricanes.   After the Florida hurricanes of 2004/2005, Florida legislators decided to freeze the home insurance rates being charged by Citizens – a politically popular decision that also resulted in everyone in Florida subsidizing the homeowner insurance rates of others who live in the areas most vulnerable to hurricanes.

Last but not least, because the rates of Citizens have been frozen for the past few years, even when consumers can find Florida home insurance in the private market, they are still given the choice of being insured by Citizens and being undercharged for their insurance.

This subsidized insurance that many Citizen policyholders receive, comes at a price.  It is funded mainly through special assessments that all of us are required to pay on our Florida homeowners insurance bills each year.  These assessments have become so burdensome, that Florida home insurance policies are not enough to pay the total cost.  That’s why you’ll see many of them on your Florida auto and business insurance bills as well.

If you are fed up with paying the Florida homeowners insurance premiums of someone else, now is the time to have your voice heard during the current session of the Florida Legislature.  Tell the lawmakers that you’ve voted for and sent to Tallahassee that you want the Florida home insurance rates of Citizens Property Insurance Corporation raised to reflect the true cost of the homes they are covering.

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Michael Letcher is a Fortune 500 executive and a licensed CPA.  His on-line buyers guide can help you find low cost Florida insurance.  Get the secrets to affordable Florida home insurance in his free newsletter at =>
http://www.homeinsurancebuyers.org

Florida Coastal Homes – How Smart Consumers Find Insurance Coverage

January 3, 2010

Let’s be honest about it.  Finding an affordable Florida home insurance policy is a challenge in most parts of the state.  Especially because most national companies no longer write homeowners insurance coverage here.  At the present time only 40 Florida home insurance companies out of over 400 companies licensed to write home insurance are still open for new business.

If your home is located in a Southern Florida coastal county, it is even harder for you to find Florida home insurance quotes.  Most southern coastal counties have about 25 companies on average that are actively writing new business – and the closer your home is to the water, the number of companies that are willing to cover your home drops off dramatically.

Many Florida coastal homes end up seeking coverage with Citizens Property Insurance Corporation where they are subject to higher premiums and special assessments.  However, just because your home is located in a Florida coastal area doesn’t always mean you have to pay more for insurance.  You can find other affordable options to cover your Florida coastal home if you know where to look.

While there are many factors that can affect your ability to find insurance for your Florida coastal home including its age and construction materials, the two main considerations are whether your home is located in the Citizens Wind Pool and the underwriting guidelines being used by private Florida home insurance companies for coastal homes.

The Citizens Wind Pool refers to the coastal areas across the State of Florida where homeowners are eligible to get a policy from Citizens Property Insurance Corporation (the state run insurance company) that specifically covers wind damage.  Homeowners that live in the Citizens Wind Pool have two policies covering their home:  one from Citizens Property Insurance for wind and another from a private home insurance company that covers losses from all other perils such as fire.  In general, the Citizen Wind Pool includes all barrier islands plus about 1000 feet from the Florida coast in most counties.  It is somewhat larger in Palm Beach, Broward, and Dade Counties since it extends from the coast all the way to Interstate 95.

Florida home insurance companies generally state their restrictions on how close a Florida home can be located to the coast based on the following:

Whether or not the home is located in the Citizens Wind Pool

A specific distance (stated in either feet or miles) that the home must be away from the coast

A limit on how old the home can be if coverage is being offered for homes close to the coast

At the present time, most Florida home insurance companies are not offering coverage with wind in the Citizens Wind Pool – however a very limited number will if the home is 20 years old or newer.

Homeowners insurance companies in Florida that are avoiding the coast are currently restricting coverage on homes that range from 1000 feet all the way to 2 miles or more from the coast.

Given the current availability of home insurance in Florida, it is still possible for many owners of Florida coastal homes to find private homeowners insurance in Florida – and at an affordable price.

Here are some things you can do to give your Florida coastal home the best chance at affordable home insurance:

Ensure that your home has hurricane shutters.  The small group of Florida insurance companies that cover coastal homes will require that your home has shutters.

When you are shopping for low Florida home insurance rates, it is essential that you work with more than one independent insurance agent – not just one.  Why?  Because at this time, out of the 40 Florida home insurance companies still writing new business, very few will write coverage in the Citizens Wind Pool or homes close to the coast.  Working with more than one agent will give you the best chance to get quotes from all of the Florida insurance companies that are still covering coastal homes.  If you miss even one of these companies you could end up paying thousands more for Florida home insurance.

If the policy on your Florida coastal home is cancelled by an insurance company that only works with captive agents that only represent that company, an independent agent will be able to present you with more options for covering your home.  You should expect the captive agent to discourage you from contacting an independent agent in order to get more quotes on your coastal home.  Don’t fall victim to this.  Seek out an independent Florida insurance agent and exhaust all of your options before allowing your home to be covered by Citizens.

If you follow the steps above, you will give yourself the most options for finding affordable insurance for your Florida coastal home.

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Michael Letcher is a former Bank of America and W.R. Grace executive and a licensed CPA.  His on-line database can help you find home owners insurance Florida for coastal homes.  Get the secrets to affordable Florida insurance for coastal homes in his free newsletter at =>
http://www.homeinsurancebuyers.org

You Can Find Insurance Coverage for an Old Florida Home

January 3, 2010

If you own an older Florida homes you face a special challenge as the Florida insurance crisis continues.  Depending on the building codes in effect when your home was built, older homes can be subject to more damage in Florida hurricanes.  Your older home could have outdated electrical, plumbing, and heating systems that makes it more susceptible to fire, water damage, and other perils.  Finally, the age, condition, and construction materials of the roof can result in larger claims for these older homes after a Florida hurricane.

With all of that said, it is still possible for many owners of older Florida homes to find private homeowners insurance in Florida – and at an affordable price.

As Florida home insurance companies consider the age of a home, they generally group homes into the following categories:

Built 2004 and prior

Built 1994 and prior

20, 30, or 40 years old or newer

Up to 75 years old

The first two categories take into consideration the Florida Building Code modifications of the early 2000’s and the mid 1990’s.  Homes built after each of the building code updates are considered to be more resistant to damage, especially from hurricanes.

The third group above varies by insurance company, but the main theme is this:  As homes reach 20, 30, or 40 years old, a 4 point inspection is generally required by home insurance companies prior to issuing coverage.  These inspections look at the age and condition of the roof, plumbing, electrical, and HVAC systems.  Depending on the results of these inspections, you may be required to update one or more of these areas.

Finally, 75 years of age is the cutoff beyond which Florida home insurance companies rarely agree to offer coverage – regardless of the outcome of the inspections and home upgrades that are present.

Before taking into consideration how close your Florida home is to the coast, the following statements are generally accurate regarding how insurance companies look at the age of your home:

Homes built 1995 and later will be the easiest to find insurance coverage for and you will have more company options to consider.

As your home reaches 20, 30, and 40 year old, there will be fewer insurance company options for you to consider as each of these levels is achieved.

If you home is over 75 years old, it is very unlikely that your home will be covered by a private Florida home insurance company.

Here are some actions you can take to have the best chance at obtaining low cost Florida insurance on your older Florida home:

Get a Florida wind mitigation inspection on your home at your own expense.

Immediately address the deficiencies identified in the wind inspection report.  There might be certain improvements that can be made to things like wall to roof connectors that don’t require a new roof or there might be other low coast mitigation steps that you can take.

Find out the age of your roof, plumbing, electrical, and HVAC systems.  Find out how much it will cost to address each of these items and make the improvements that you can afford to make now.

Some of the upgrades that you need might qualify for Federal energy tax credits of utility company credits for improved efficiency.  Find out if either of these sources are willing to give you some financial assistance.

Let your local Florida legislators know about your situation and encourage them to extend the My Safe Florida Home program – and to increase the number of homes that are eligible for matching grants to harden Florida homes.

Finally, when it comes to shopping for Florida home insurance, it is essential that you work with more than one independent insurance agent – not just one.  Why?  Because at this point in time, there are about 40 Florida home insurance companies still writing new business.  However, as the age of your home increases, many of these companies won’t cover your home.  Working with more than one agent will give you the best chance to get quotes from all of the Florida insurance companies that are still covering older homes.  If you are unaware of even one of these companies, you could overpay for Florida home insurance by thousands of dollars.

Don’t rely on misinformation or word of mouth when it comes to finding affordable Florida home insurance on an older home.  Follow these steps to give you the most options for insuring your older Florida home.

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Michael Letcher is a former Fortune 500 executive and a licensed Certified Public Accountant.  His on-line guide can help you find low cost insurance Florida for your older home.  Learn the secrets to affordable Florida insurance in his free newsletter at =>
http://www.homeinsurancebuyers.org

Cheap Florida Home Insurance – Where Can You Find It?

January 2, 2010

Homeowners in Florida still face a confusing home insurance market and few companies to choose from.  Despite two straight years of legislative tampering with the market, Florida home insurance is still extremely expensive and hard to find – especially for homes that are older or closer to the coast.  Most of the national insurance companies have left the state leaving homeowners with a limited number of relatively new, smaller, local companies to protect their largest investment.

With all of the uncertainty in this market, what can you do to create competition for your Florida home insurance and save the most money?

For starters, you need to understand that while there are over 450 companies licensed to write homeowners insurance in Florida, only around 40 are actually writing any new business at this time.  And of those 40, only a portion of those companies are willing to cover your home.  Why?  Because each company establishes underwriting guidelines for the type of homes they want to insure.  The two most significant factors that companies use to determine whether they want to insure your home is its age and its distance from the Florida coast.

For the sake of discussion, let’s assume that there are 25 companies of the 40 out their right now that are willing to insure your Florida home.  The way to get the lowest cost homeowners insurance would be to get each and every one of these companies to quote your home.  So how do you do that?

For starters each insurance company offers their insurance through agents that represent them.  This results in a fragmented market where consumers like you run a high risk of not getting to all the companies that want to cover your Florida home due to the following:

Companies do not make their insurance available to each and every agent.

Florida Insurance Agents do not want to offer insurance from all companies.

Some companies have captive agents that are only allowed to write coverage exclusively for their company.

Some companies sell directly to the public and bypass the agent network completely.

How does all of this affect you?

If you only contact one Florida insurance agent, you are guaranteed to miss out on many companies that are interested in covering your home.  If you only obtain quotes from one agent, you will be limiting the competition for your Florida home insurance business and your chances of overpaying on homeowners insurance will increase dramatically.

You could rely on quote generator websites that ask you to provide sensitive, personal information.  You will find some companies using this method, but you will not get to all the companies that want to cover your home.  And you many get tons of unwanted phone calls and emails from multiple agents that are all representing the same company.

So what’s the best way for you to get quotes from all of the Florida home insurance companies who want to cover your home?

Follow these steps to create the most competition for your Florida homeowners insurance business and you could save thousands:

Utilize Florida insurance agents that are independent – not captive agents that are only allowed to represent one company.

Work with more than one independent insurance agent.  If the first agent doesn’t represent all of the companies who want to offer you coverage, a second or third agent might represent the companies the first agent doesn’t represent.

Use independent agents that represent a large number of Florida homeowners insurance companies.  An agent that has only four companies is too small for you.  Look for agents that represent at least 10 companies or more that are actively writing new business.

Finally, don’t ignore the homeowners insurance companies in Florida that sell their insurance direct to the public using their own agency.  Get quotes from these companies directly either by phone or through their website.

These steps will dramatically increase your chances of getting to all of the companies who want to cover your Florida home.  Each additional company that you can get to quote your home results in more competition and can save you thousands on homeowners insurance in Florida.

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Michael Letcher is a former Fortune 500 executive and a licensed Certified Public Accountant.  His on-line guide can help you find low cost Tampa homeowners insurance.  Get all the secrets to inexpensive home insurance Tampa in his free newsletter at =>
http://www.homeinsurancebuyers.org