Florida – HomeownersInsurance.org http://www.homeownersinsurance.org Homeowners Insurance Tips and News Fri, 28 Jun 2013 15:01:02 +0000 en-US hourly 1 https://wordpress.org/?v=4.8.1 Sinkholes Turn Homes to Money Pits http://www.homeownersinsurance.org/sinkholes-turn-homes-to-money-pits/ http://www.homeownersinsurance.org/sinkholes-turn-homes-to-money-pits/#respond Fri, 22 Jan 2010 17:20:10 +0000 http://www.homeownersinsurance.org/?p=179 sinkholeIn some places like central Florida, it’s amazing that anyone would choose to build a home. If you build a home in a swamp, it’s likely to eventually get swallowed up. Just ask the king of Swamp Castle. When it does, you could be facing a severe loss under a new Florida law that kicked in on January 1.

New Sinkhole Law

Under the new law, changes are coming to the way insurance companies can provide sinkhole insurance. The law is designed to help reduce the cost of homeowners insurance premiums for most Floridians, but it may wind up hurting those folks who happen to find their homes being swallowed up by the earth.

The new law lets private insurers change policies to drop portions of sinkhole coverage. This could ultimately cut premiums for residents of some sinkhole-prone areas. Their premium rates could drop by as much as half. The state-run insurance company, Citizens Insurance, has done this for more than a year now.

Why it Rocks

Proponents of the law point to the money that’s been saved in insurance premiums. It’s estimated that as much as $54 million has been saved in premiums. Unfortunately, it isn’t yet certain how many people have found themselves the victim of a sinkhole without any recourse.

Why it Sucks

Opponents of the law suggest that it’s actually harmful to homeowners. The law still requires policies to cover major catastrophic ground collapses, but it doesn’t force them to cover more minor issues caused by sinkholes such as settlement distress or cracking.

The Truth of the Matter

Consumers can keep the additional coverage at an additional cost. In addition, insurance companies are required to notify residents as to which kind of coverage was dropped. Advocates of the law point out that it doesn’t limit consumers in the type of coverage that they can buy, rather it helps consumers who don’t need sinkhole coverage by dropping their premiums, by a significant percentage in some cases.

If you live in an area prone to sinkholes, you might consider continuing the coverage. That way, if the unthinkable happens, you can rebuild. In some instances, you may be able to add a specific rider that will include sinkhole coverage, or at least certain types of damage to your home that can occur from sinkholes.

Photo via Foxtongue

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Homeowners Choice In, Citizens Out http://www.homeownersinsurance.org/homeowners-choice-in-citizens-out/ http://www.homeownersinsurance.org/homeowners-choice-in-citizens-out/#respond Tue, 19 Jan 2010 17:04:45 +0000 http://www.homeownersinsurance.org/?p=167 umpireoutThe latest news from Florida show just how screwed up the homeowners insurance situation in that state really is.

The State of Florida has some screwy laws when it comes to homeowners insurance. Among other things, the state has a state-owned insurance company, Citizens Property Insurance Corporation.

The way that Citizens Property Insurance Corporation works is this: the company serves as a home insurer of last resort. This means that people that can’t get homeowners insurance elsewhere can turn to the company.

This sounds great, in theory. However, Citizens has become the largest homeowners insurance provider in the state, with over a million policies in force. The existence of Citizens and their position as a state-run provider has caused issues for other insurance companies. Combined with serious regulation of the insurance industry, the situation has led other private insurers, such as State Farm, to consider leaving Florida altogether.

The State of Florida encourages private insurers to step into the mix. The Florida “take out” program is set up to do just that. The program allows private insurers to assume some of the Citizens policies.

In December 2009, one company assumed 23,000 of the policies in the Citizens portfolio. While this represents a fairly small number of the overall Citizens policies, it’s a step in the right direction. Homeowners Choice, Inc., effectively increased its insurance policy holdings by 44% when it took over those policies from the state.

The assumption of these policies had to be approved by the Department of Insurance in the state of Florida. Other companies have applied to take over policies, and some have been approved. Most of the time, however, these requests are rejected because the insurance provider fails to meet specific criteria or because there are elements missing from the replacement policies.

Photo via jordanfischer

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State Farm: In or Out of Florida? http://www.homeownersinsurance.org/state-farm-in-or-out-of-florida/ http://www.homeownersinsurance.org/state-farm-in-or-out-of-florida/#respond Tue, 17 Nov 2009 23:57:57 +0000 http://www.homeownersinsurance.org/?p=131 FloridaFollowing the insurance industry in Florida can be a lot like riding a roller coaster. Over the past year, one company in particular has found themselves going back and forth about whether they will continue to do business in the homeowners insurance and property insurance markets in Florida.

State Farm Insurance was anathema last winter when they announced that they’d be pulling out of Florida. At the time, Governor Charlie Crist was quoted as saying, “Floridians will be much better off without them.” This was big news, because 700,000 homeowners policies in the state are held by the company, which is the largest private insurer in the state. The speculation was that those policies would be absorbed by Florida startup companies.

The Tide is Turning

Today, however, things seem to be changing. Regulators now indicate that there is a chance that some of State Farm’s homeowners insurance business will stay in Florida. Kevin McCarty, the state’s insurance commissioner, says that the state is optimistic and that it would be good all around to have State Farm’s presence in the state.

State Farm, however, doesn’t yet seem to give any indication that things have changed. The company states that they’re still leaving, and that they are negotiating with the state of Florida over the terms of the company’s withdrawal. The company believes the legislation regarding premium structure in the state to be inadequate. State Farm indicated they would pull out after the state rejected their request to increase rates.

Today, however, state regulators seem anxious to try to keep State Farm in the state. They seem more willing to approve regulatory hikes in premium rates, and to give insurers incentives to keep them in the state and insuring its residents.

Other insurance companies, such as Universal Property and Casualty and Citizens Property Insurance, have seen their rate increase requests improved over the past several months. In addition, regulators in Florida suggest that State Farm could reduce its discounts or change its discount structure to eliminate some discounts in order to give an effective rise in premiums.

Over the past few months, regulators have also softened their tone. They are trying to appear more sympathetic to property insurers. State Farm’s representatives have applauded these kinds of changes, but they also note that nothing has changed fundamentally. Risk in the state is high, and the premiums are too low to make it worth it for the company.

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