Florida Real Estate Blog

Hurricane Season 2013 Starts Before Flood Insurance Begins - If You Wait Too Long!

MIAMI – May 13, 2013 – Many homeowners don’t realize that their property insurance policy covers the driving winds of a hurricane, but not rising waters, such as from storm surge. And while the former damage can be massive, the latter damage can make a house unlivable.

The vast majority of U.S. flood insurance policies are issued by the National Flood Insurance program (NFIP), though most people simply refer to it as flood insurance.

Unlike other types of property insurance, however, flood insurance doesn’t kick in the same day a homeowner applies. In order to avoid an onslaught of new policies from an area threatened by an impeding hurricane, NFIP requires a 30-day waiting period for coverage to begin in all but a very few special circumstances.

That means Floridians who want flood insurance coverage for the 2013 storm season are already a bit late on their application if they hoped to have it by June 1, the first day of the 2013 hurricane season.

How it works

Flood insurance protects two types of insurable property: building and contents. The first covers a building, the latter covers possessions. Neither one covers land.

Building coverage includes:
• The insured building and its foundation
• Electrical and plumbing systems
• Central air conditioning equipment, furnaces and water heaters
• Refrigerators, cooking stoves and built-in appliances, such as dishwashers
• Permanently installed carpeting over unfinished floors

Contents coverage includes:
• Clothing, furniture and electronic equipment
• Curtains
• Portable and window air conditioners
• Portable microwaves and dishwashers
• Carpeting that is not already included in property coverage
• Clothing washers and dryers

NFIP falls under the Federal Emergency Management Agency (FEMA). A four-page PDF flyer on its flood insurance website, floodsmart.gov, provides an overview of the NFIP program.

© 2013 Florida Realtors®

Reprinted with permission. Florida Realtors®. All rights reserved.

Florida Releases Data Concerning the Number of Policies the State's Insurers Covered in 2012

TALLAHASSEE, Fla. – Jan. 9, 2013 – The Florida Office of Insurance Regulation (OIR) has released its 2012 Fast Facts report, created to give interested parties statistical data about Florida’s insurance market. The report compiles financial and regulatory information, insurance premium volume, number of domestic insurance companies and related entities, enforcement actions/consumer recoveries, public hearings and more.

The Fast Facts report also includes four “Top 20” lists with information about insurance companies in Florida for personal residential, personal automobile, life and annuity, and accident and health lines of business.

For residential homeowner policies, Florida-owned Citizens Property Insurance tops the state list with 1.4 million policies, or more than the number covered by the four largest private insurers combined.

The latest report includes the following breakdown for residential insurance writers by size, followed by number of Florida policies in December 2012:

1. Citizens Property – 1,423,160
2. Universal Property & Casualty – 578,825
3. State Farm Florida – 453,997
4. St. Johns Insurance – 174,021
5. Security First – 147,080
6. USAA – 142,733
7. Castle Key Indemnity (Allstate) – 131,759
8. Castle Key Insurance (Allstate) – 127,540
9. Homeowners Choice – 122,737
10. ASI Assurance – 113,603
11. Florida Peninsula – 112,372
12. American Integrity – 106,052
13. Tower Hill Prime – 104,594
14. American Bankers – 96,381
15. United Property & Casualty – 95,036
16. Florida Family – 87,059
17. ASI Preferred – 78,977
18. Tower Hill Signature – 78,816
19. Universal Insurance – 76,559
20. Southern Fidelity – 74,556

The Fast Facts report can be downloaded through the Florida Office of Insurance Regulation website.

© 2013 Florida Realtors®

Reprinted with permission. Florida Realtors®. All rights reserved.

New Type of Homeowners Property Insurance to be Offered by Florida's Citizens Property Insurance Corporation

TALLAHASSEE, Fla. – Jan. 8, 2013 – Florida-owned Citizens Property Insurance Corp. was required by law to start offering less expensive HO-8 policies this month, and it says it expects HO-8 policies to be commercially available sometime in February.

However, an HO-8 policy – about 21.7% less expensive than Citizens’ current HO-3 policy – applies only to homes at least 51 years old with a replacement value less than $200,000. And it offers less coverage.

HO-8 development took a few turns before the final version was approved. The original vision called for a policy that would entice private insurers to enter the Florida market. However, Citizens officials and Florida regulators had trouble reaching agreement on what the HO-8 should – and should not – cover.

At least one Citizens board member, Greg Rokeh, felt that the new policy would entice more homeowners, not less, to become Citizens customers if they focused on the “cheaper policy” part more than the “less coverage” part.

The details

• An HO-8 policy generally pays cash value following a loss; however, Citizen’s version would still pay replacement cost, like its current HO-3 policy. Without that change, mortgage lenders might not accept the HO-8, since they want assurance that the value of a property will be guaranteed following a disaster.

• A property must have a replacement value less than $200,000 and be at least 51 years old. Those restrictions were created to deter most homeowners from opting for the HO-8. It also minimizes the number of commercial property owners who qualify.

• Sinkhole coverage from Citizens can be added to HO-8 policies at the same rate paid by HO-3 policyholders.

• HO-8 excludes all coverage for water damage, which is the primary reason the policy costs over 20 percent less. However, “Water damage is one of the most common types of insurance claims to Citizens,” according to Citizens Spokesperson Candace Bunker.

“(The HO-8) started out as a sound idea,” says Florida Association of Insurance Agents President Jeff Grady. “But by the time it went through the Citizens assembly line and the regulatory directives, although restricted, the policy is not what was intended.”

One issue has not yet been settled. Citizens cannot raise rates more than 10 percent per year on existing policies, but it claims that the HO-8, as a new policy, isn’t restricted by the 10 percent yearly cap.

However, Office of Insurance Regulation Spokesperson Amy Bogner disagrees, saying the 10 percent cap still applies “unless the legislature changes the statutes.”

Source: Claims Journal, Jan. 8, 2013, Michael Adams

© 2013 Florida Realtors®

Reprinted with permission. Florida Realtors®. All rights reserved.

"Force-Placed" Homeowners Insurance Lawsuit Allowed to be Heard in Court

BOSTON – Dec. 6, 2012 – A Florida woman forced to take insurance by her lender alleges the tactic was predatory. A judge rules the case can proceed.

According to Gilman Law LLP, which represents 89-year-old homeowner Celeste Coonan, CitiMortgage force-placed three types of insurance – wind insurance, flood insurance and hazard/fire insurance – from 2009 to the present. The company used insurer Assurant Inc. Each time, Coonan would provide proof that she already had coverage and CitiMortgage would eventually remove the charges.

After it happened several times however, Coonan filed a complaint with the Florida Attorney General, which, according to Coonan’s allegations, led CitiMortgage to review her account, where it discovered that she actually had a brief lapse in coverage. CitiMortgage then charged several thousand dollars to her escrow account. The lender, she says, is now threatening to foreclose if she doesn’t pay the escrow charges.

Lenders use force-placed insurance on mortgaged homes if they believe a property owner has failed to maintain insurance required in the terms of the mortgage contract. Gilman Law says that a recent investigation conducted by the New York Department of Financial Services found that rates for force-placed insurance can be as much as ten times the cost of normal homeowner’s insurance, while offering less protection.

Gilman Law says the study found that two companies –Assurant Inc. and QBE Insurance – control about 90 percent of the force-placed insurance market. In addition to New York, California and Florida are actively investigating the force-placed insurance market.

© 2012 Florida Realtors®

Reprinted with permission. Florida Realtors®. All rights reserved.

Quiet End to the 2012 Hurricane Season here in Florida

Today, November 30th, is the official "last day" of the 2012 Hurricane Season. Though possible, it is very unlikely that a storm will form now. The waters of the Atlantic Ocean are just too cold now. And warm water is what powers these massive storms.

This summer we had many rainy afternoons which were welcome since they help to replenish our underground acquifers. And that is where most of our water here comes from. No mountain lakes or rivers to quench our thirst here. And the worst storm, Hurricane Sandy, went up the east coast to cause big problems for the people of the northeastern United States. Though we have great sympathy for them, we are glad that we were spared.

Speaking of insurance, I always recommend that once the official storm season is over here in the Sunshine State, it might be a good time to check out what other insurance companies are charging for the same coverage you currently have. Now that the 2013 hurricane season is many months off, and the risk of damage is less, it might be possible to find better rates. In any case, it costs you nothing to shop around and you might save a few hundred bucks and get better coverage. What do you have to lose by asking? Do some comparison shopping while you are down here.

Much of my storm information comes from the National Hurricane Center. They follow tropical depressions, tropical storms, and hurricanes from birth to death. It can be a useful site to visit. If you would like to try it out, click on the following link: http://www.nhc.noaa.gov  I suggest that you "bookmark it" or "make it a Favorite" for future reference if you live in an area that can be affected by tropical storms or hurricanes during future hurricane seasons. You will find it interesting and helpful to track the path of each storm in years to come.

I also invite you to visit my webpage at: http://www.jelwell.century21bnr.com/ where you will find links to many interesting sites dealing with real estate. You are always welcome there.

I can also be contacted via e-mail at: jelwell1@tampabay.rr.com or by phone at: 813-783-4444  JOHN ELWELL - REALTOR at CENTURY 21 Bill Nye Realty, Inc. in Zephyrhills, Florida. It would be a pleasure to assist you in buying and/or selling property in the eastern half of Pasco County, including Zephyrhills and Dade City. Licensed in Florida.

Image from NOAA

Florida's Insurance Commissioner to Permit Citizens Property Insurance to Shift 150,000 Policies to Other Companies

TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty today announced the Office has approved the removal of 150,000 policies from Citizens Property Insurance Corporation (Citizens) by four private sector companies beginning November 6, 2012. The November take-out total will add to the 84,339 already taken out during this calendar year.

“The leadership and commitment by Florida’s domestic companies to expand their business in our state sends a clear signal that we have a reinvigorated homeowners’ insurance marketplace,” stated Commissioner McCarty. “It gives me great pleasure to announce that the latest take-out figures have the potential to make 2012 the largest take-out year for Citizens since 2008.”

The following companies will participate in the November 6 take-out:

- Florida Peninsula Insurance Company – 35,000 policies
- Homeowners Choice P&C Insurance Company – 75,000 policies
- Southern Fidelity P&C, Inc. – 30,000 policies
- Southern Oak Insurance Company – 10,000 policies

All of the take-out companies are Florida domestics having been licensed in Florida relatively recently from 2004 (Southern Oak) to 2012 (Southern Fidelity). These companies not only insure Florida residents, but also provide Floridians jobs by operating in our state with home offices in Boca Raton (Florida Peninsula), Jacksonville (Southern Oak), Tallahassee (Southern Fidelity), and Tampa (Homeowners Choice). Cumulatively, these four companies employ 239 Floridians.

Even though the approved removal of 150,000 policies combined with the 84,339 policies taken out to date should easily surpass the take-out totals for the last three years, it will take awhile before final numbers can be tabulated. Under Florida law, policyholders have 30 days to decline the assumption of their policy by a private company, and remain as a Citizens’ policyholder. Regardless of the “uptake” percentage, the 2012 totals are expected to exceed the total takeouts in 2009 (149,645 take-outs), 2010 (59,792 take-outs), and 2011 (53,577 take-outs).

Citizens’ policyholders will be notified of the take-out request (assumption) on October 1, and can choose to accept or decline the take-out offer. If policyholders do not respond, they will be “assumed” by the private sector company on November 6.

Four other companies also expressed interest in removing policies from Citizens including American Integrity Insurance Company (50,000 policies), Tower Hill Preferred Insurance Company (43,250 policies), Tower Hill Select Insurance Company (38,212 policies), and Tower Hill Signature Insurance Company (49,825 policies). However, proposals from these companies are contingent on the Citizens’ Board approving a surplus notes program, and having this program reviewed by the Office. These companies have home offices in Gainesville (The Tower Hill Group), and Tampa (American Integrity); American Integrity and the Tower Hill Group cumulatively employ 439 Floridians.

Earlier this morning, the Office sent a letter to Citizens encouraging them to give first priority to proposals that do not require Citizens to pay a financial incentive, such as a surplus note.

For more information about the take-out process and to view the financial status of all approved take-out companies, visit the Office’s website at: http://www.floir.com/Sections/PandC/TakeoutCompanies.aspx.​

Source: Citizens Property Insurance Corporation

Florida's Citizens Property Insurance Issues New Requirements for Older Mobile Homes

Property insurance is always a sore point for homeowners in Florida. This is especially true fo the owners of older mobile homes. In our 55+ parks and others, these homes can be just as nice as nice can be. The owners take pride in their properties and many have updated them and added on great features like carports, Florida rooms and even heated & air-conditioned additions. I have entered many and would not have guessed their age if I had not seen it on the tax records.

In recent years, the owners of these homes could get property insurance from Florida's own Citizens Property Insurance Corporation which was set up by our state as the insurer of last resort for properties that could not get conventional coverage via other insurance underwriters.

Up until September 1, 2012, all a mobile home owner had to do was have the roof inspected to confirm that it was in good condition and would not need replacement or repairs for a minimum of 3 years. No other inspections were required by Citizens. The coverage was only for the main section of the home, carports, utility rooms, most porches or Florida rooms were not covered and the mobile was only insured for its "true value" not its replacement cost. But, at least some coverage, including liability and contents was available. You can read the Frequently Asked Questions about the "true value" issue by downloading the following document: Download Citizens Policy Regarding Mobile Home Coverage

 

 

 

However, as of September 1, 2012, new rules were put in place by Citizens for mobile homes that are over 30 years old. These include, but are not limited to, the following:

• A "Four Point Inspection" is required of any property prior to a policy being underwritten or bound.
• The inspection will include the roof, the electrical system, the plumbing  of the home, and the heating/AC system.
• The roof has to have at least 3 years of life left on it. Other insurance companies could require more.
• No structural damage.
• No plumbing leaks can exist, and if leaks have caused damages in the past, these have to be repaired prior to approval of insurability.
• No polybutylene pipes (also known as "gray pipe") can exist in the home.
• Breaker boxes of the type known as the Federal Pacific Stab-Loc Breaker System are no longer acceptable and need to be replaced.
• The heat and AC systems have to be operable within industry standards. 

A certified inspector must confirm that all of the above items meet Citizen's requirements prior to the home being insured. If you do happen to find another company that will insure your home, they may have other requirements. But finding another company is unlikely. However, it never hurts to ask.

Much of my information on this issue comes from the folks at the Giella Insurance Agency in Zephyrhills, Florida. I am an expert in real estate, but they are experts in the realm of property insurance. Over the years they have worked with many of my customers with good results. If you are looking for insurance on any type of home or have questions about these new rules for Citizens Insurance, you can contact Dylan at dgiella@giellainsurance.com  or Kathy at:  kmckienzie@giellainsurance.com Or you can call them at: 813-782-291. You can also visit their webpage at: http://giellainsurance.com/home.html  

Do keep in mind that they handle other insurance companies as well, not just Citizens. You have many options when shopping for insurance in Zephyrhills, Florida, but Giella Insurance Agency is a good place to start. That is what my clients tell me!

If I can assist you in any way when selling or buying a home, do not hesitate to contact me JOHN ELWELL - REALTOR at CENTURY 21 Bill Nye Realty, Inc. at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com I also invite you to stop by my main webpage at: www.jelwell.century21bnr.com Licensed in Florida.

Florida's Citizens Property Insurance Corporation's Coverage for Older Mobile Homes

As many Florida residents know, here many of the major insurance companies have turned "yellow" and no longer write new policies in our state. There are several that still do and we are thankful to have these great companies on hand here.

But when it comes to older mobile homes, often the only option people have is Citizens Property Insurance Corporation. An entity that the state set up so that the real estate industry here would not be harmed due to the fact that many homes were uninsurable.

So if you buy a very old conventional home or a not so old mobile home, you may be dealing with Citizens. In recent years when buyers went to an agent to get coverage they discovered, along with me, that now Citizens will not offer "replacement coverage" on mobile homes constructed prior to 1994, at this time.

Instead, they will offer to insure the main structure of the mobile home (no carports, utility rooms, and often not the Florida Rooms or porches) for their VALUE at that time. It is a bit like when you value a car by looking in the Blue Book. Citizens will determine what the mobile is worth when the policy is written and that is the coverage that they will offer.

For example, if you are buying a 1978 Fleetwood Barrington in good condition with no special upgrades, they might determine that as a "used mobile home" its value is $18,900. That is what you would get if it blew away or burned down. They would NOT buy you a brand new replacement home of the same size, make and model. Owners of conventional homes can get replacement coverage, but not these mobile homes.

So it is possible and advisable to get the coverage that you can since you will not suffer a total loss, and you will also have coverage for the contents and LIABILITY. That latter item can be important since you certainly don't want someone to trip on your front steps and then sue you for thousands.

Do note that I  AM NOT an insurance agent. They know much more about this than I do. So I suggest that prior to buying a home, you speak with a licensed insurance agent who can help you wend your way through the insurance thickets and get you exact information.

To assist you I am making the information packet that Citizens has published available to you here. Just click on the following linke to download this brochure to your computer. It is in the form of a Question and Answer document. I am sure that it will help you understand what I have discussed in this post. To download the document click on the following link: Download Citizens Policy Regarding Mobile Home Coverage

If I can assist you in any way concerning your real estate needs, do not hesitate to contact me at any time. John Elwell - REALTOR at CENTURY 21 Bill Nye Realty, Inc.  813-783-4444. Licensed in Florida.

If you have specific questions about insurance, you should call a local insurance agent to get the best and latest information concerning the requirements of Citizens and other companies that are writing policies in the state of Florida.

Tropical Storm Isaac on Possible Path Toward Florida - Be Alert and Watchful!

 
As of today, 8/22/2012, Tropical Storm Isaac is over the eastern Caribbean Sea. Its projected path has it moving in a northwesterly direction over Cuba and then turning toward Florida with landfall predicted for early next week. That is a long way off in the life of a hurricane, so anything is possible. But this storm bears watching. Keep yourselves up-to-date via the internet, TV, and radio. Don't wait until the last minute.

We have had a lot of rain here in Florida, which has been wonderful for us. However, we do not need the VERY heavy downpours that could accompany a tropical storm or a full-fledged hurricane! We have not had one hit us in the Tampa Bay area for years and I am hoping that we get missed this time as well.

The letter inside the dot on the track of the storm indicates the National Hurricane Center's forecast intensity for that point in time:

D: Tropical Depression – wind speed less than 39 MPH
S: Tropical Storm – wind speed between 39 MPH and 73 MPH
H: Hurricane – wind speed between 74 MPH and 110 MPH
M: Major Hurricane – wind speed greater than 110 MPH

Do keep in mind that the storm is still faraway, and wind directions have been known to change. I have even seen storms do loop-the-loops and come right back over the same area. So the trajectory of this storm could change. It could miss us altogether. You never can tell this far out. But it pays to be alert and take cautious steps to prepare. Just in case!

If you are in the process of closing on a home sale in the next few days, do be aware that once a storm warning is issued for any part of the state of Florida, it is likely that ALL insurance companies will stop writing new policies until the storm's threat has passed. So if you have not already obtained a binder on your insurance coverage, speak with your real estate agent immediately about what is happening. If you used one of the Florida purchase agreements that most agents here use, there is specific language concerning hurricanes and underwriting moratoriums that is there to protect you from having to purchase an uninsured home. And if you are financing the purchase, keep in mind that your bank WILL NOT fund your loan if there is no proof of adequate insurance coverage on the home. See your agent for more information concerning this issue.

Much of my information comes from the National Hurricane Center. They follow tropical depressions, tropical storms, and hurricanes from birth to death. It can be a useful site to visit. If you would like to try it out, click on the following link: http://www.nhc.noaa.gov I suggest you "bookmark it" or "make it a Favorite" for future reference if you live in an area that can be affected by tropical storms or hurricanes. You will find it interesting and helpful to track the path of each storm. You can also download a Hurricane Tracking Map by clicking on the following link: TRACKING MAP

I will also try to update my weblog with new posts if it appears that a hurricane or another major storm will make landfall in our area. So come back here to check if you want to. But the TV, radio, and internet will have the most up-to-date information available.

You can also find out how to prepare for hurricanes and other disasters at the following state site: http://www.floridadisaster.org/ Do not wait until a storm is upon us to prepare your home and family. Hopefully we will make it through 2011 with no major storms paying us a visit, but you never know. Better safe than sorry!

I invite you to visit my webpage at: http://www.jelwell.century21bnr.com/ where you will find links to many interesting sites dealing with real estate. You are always welcome there. JOHN ELWELL - REALTOR at CENTURY 21 Bill Nye Realty, Inc. Licensed in Florida

I can also be contacted anytime via e-mail at: jelwell1@tampabay.rr.com or by phone at: 813-783-4444

Image from NOAA

When Hurricanes are Near Florida, Insurance Companies Won't Write New Policies

MIAMI – Aug. 21, 2012 – Homebuyers that need property insurance coverage to get a mortgage can find Florida’s hurricane season a bit challenging. While the rules vary between insurance companies, all have some kind of guideline that suspends the issuance of new policies when a storm threatens the mainland.

State-owned Citizens Property Insurance has some of the strictest policies. Citizens won’t allow Miami buyers, for example, to get a policy or existing homeowners to expand a policy if a storm threatens Pensacola, even if the skies remain sunny in South Florida.

According to Citizen’s website: “No application for new coverage or endorsement for increased coverage may be bound, written or issued, or monies received, regardless of effective date, when a Tropical Storm or Hurricane Watch or Warning has been issued by the National Weather Service for any part of the State of Florida.”

Other insurers have rules that cut off coverage when a hurricane is “in the box” and threatening the Florida coast, though the size and location of that “box” varies among insurers. If a storm seems possible around a scheduled closing, buyers can contact their insurer to find out if they have options, such as taking out a policy early.

For more information on Citizens’ policy regarding storms, visit their website.

© 2012 Florida Realtors®

Reprinted with permission. Florida Realtors®. All rights reserved.