Florida Real Estate Blog

Florida's 2012 Hurricane Season Just 1 Week Away - Get Ready!

MIAMI – May 25, 2012 – Thanks to El Nino and other conditions, forecasters predicted yesterday that the 2012 hurricane season – which starts exactly one week from today and runs through November – will be normal. It will see nine to 15 tropical storms with four to eight of those becoming hurricanes. One to three of those could become major storms, defined as ones with winds greater than 110-miles per hour.

Before the season begins, homeowners should prepare. “It’s crucial for policyholders to know about their insurance coverage before a storm hits,” says Ken Enscoe, Nationwide’s director of catastrophe claims operations. “Advance planning is key to surviving the aftermath of a hurricane.”

General steps to prepare for storm season

• Before an event, examine your property for physical or liability hazards.

• Find out if your home meets current building code requirements for high-wind regions.

• Check the four critical areas where wind can enter a home: roof, windows, doors and garage doors. Either you or a building contractor can build and install temporary protection, such as approved wind shutters or plywood on windows and coverings for patio and entry doors, strengthen and stiffen garage doors, and install heavy-duty door hardware.

• Read and understand your insurance policy.

• Inventory valuables and contents in the home with pictures or video. Note the approximate value of each item and the date of purchase. You can also send an inventory to a family member outside your region for safekeeping.

• Make sure important documents, such as an insurance policy or mortgage papers, are stored in a safe deposit or fire safe box.

• Floodwater that enters into a home may be covered by specialized flood coverage underwritten by FEMA’s National Flood Insurance Program. Check with your insurance agent about flood policies, but note that they take 30 days to become effective once you sign up.

© 2012 Florida Realtors®

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

Note from JOHN ELWELL: Next week I will post more information about the hurricane season and how to prepare for one if it hits us. I will include links to state websites that you will find useful as you get ready. So check back after Memorial Day!

Florida's Citizens Property Insurance Rejects Large Rate Increases for New Buyers, At Least for Now

TAMPA, Fla. – April 26, 2012 – Citizens Property Insurance Corp. considered a premium increase for new homeowners at a meeting in Tampa today, but ended up making no decision in order to give analysts time to consider the legality, to look at broader options involved in rate calculations, and to consider the ramifications of doing so.

Citizens, the state-run insurer of last resort, has actuarially unsound rates, according to most analysts. The fund largely covers Florida homeowners in high-risk storm areas, but critics say it doesn’t charge enough to create reserves that would cover damage if a significant storm hit the state.

Critics of Citizens, which include Gov. Rick Scott, say Citizens’ low premiums cause two problems: They put all Florida policyholders at risk in the event of a major storm; and they undercut private insurance companies, which makes the Florida insurance market less competitive.

In 2009, the Florida Legislature passed a law limiting Citizens premium increases to a maximum of 10 percent per year, and it became effective in 2010. Since then, Citizens Property Insurance’s governing board has attempted to build reserves and charge more while still adhering to the letter of the law. The company has, for example, removed some homeowners from coverage and cancelled insurance for properties under construction.

Another idea for lowering risk and raising revenue came to light within the past few days – charge new homeowners more than neighbors with an existing Citizens policy. Proponents of the change said the 10 percent maximum increase established in law applies only to existing policyholders. Opponents disagreed.

At the Citizens board meeting today, Sen. Mike Fasano, R-New Port Richey, testified that raising rates on homebuyers would seriously undermine the market. “You can get all the rhetoric that you want, but the private companies are not coming back to some areas of this state – they’re just not,” he said. “Study or no study, if this is pushed or approved you will hurt our economy.”

The board settled on three major issues for further review. First, insurers break the state into “territories,” and owners in each territory pay a rate based on similar calculations. The board wants to look at how proposals affect not just the state, but also the individual territories.

Two, the board wants to consider a clear rate schedule that applies to new and existing coverage. Three, the board wants to get lawmakers and the Florida Office of Insurance Regulation involved in decisions, in part because lawmakers have statutory authority over Citizens and its rates.

Based on the areas of concern, Citizens board members decided the issue needed more study and may revisit it later.

Florida Realtors continues to monitor developments.

© 2012 Florida Realtors®

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

Six Questions Homeowners Should Consider When Buying Property Insurance

NEW YORK – Feb. 21, 2012 – Homeowners should work with experts to determine the type of homeowners insurance they need and the amount of coverage.

“Besides knowing the basics of what a standard homeowners insurance policy covers, consumers should ask a series of questions – and receive satisfactory answers to each of them – before buying a new policy or renewing an existing one,” says Michael Barry, vice president, media relations, Insurance Information Institute (I.I.I.). I.I.I. is a nonprofit, communications organization supported by the insurance industry.

According to I.I.I., there are six basic questions everyone should ask before buying or renewing a homeowners insurance policy:

1. How much would it cost to rebuild my home in its current location in the event of a total loss? Ideally, a homeowners insurance policy should cover the cost of building a new home from scratch. In general, homeowners policies cover partial or total damages caused by fire, hurricane, hail, lightning or any other disaster if it’s listed in the policy. Flood and earthquake-related losses must be insured separately because both perils are excluded in standard homeowners insurance policies.

2. How much is my personal property worth in the event of a total loss? A homeowners insurance policy should cover the cost of replacing all personal property (furniture, appliances, clothing) should it be stolen or destroyed by fire, hurricane or another insured disaster. Most companies provide personal property coverage equal to about 50 to 70 percent of the amount of insurance on the home’s structure. (A $100,000 policy for the structure would have perhaps $50,000 to $70,000 worth of personal property coverage.)

However, the best way to determine personal property coverage in a specific situation is to conduct a home inventory. I.I.I. provides online software to help homeowners catalog and value possessions (link underlined to: https://www.knowyourstuff.org/iii/login.html) as well as an iPhone app.

3. How much liability protection do I need? Liability covers homeowners against lawsuits for bodily injury or property damage caused to other people, including damage caused by pets. The liability portion of a policy pays legal defense costs and any court awards – but only up to the limit set in the policy. It’s effective not just inside the home but also anywhere in the world. Liability limits generally start at about $100,000, and many insurance agents will recommend at least $300,000. Homeowners with significant assets may want more; others may want less.

4. What level of additional living expense coverage do I need? The Additional Living Expenses (ALE) provision is found in standard homeowners insurance policies. It pays for the costs of living away from home if damage from an insured disaster makes the house uninhabitable. ALE covers hotel bills, meals and other expenses above customary living expenses.

ALE coverage differs from company to company. Many policies provide coverage equal to about 20 percent of dwelling protection. For example, if the structure of your home is insured for $100,000, you would have $20,000 of ALE coverage. Some companies impose a time limitation, such as 12 to 24 months.

5. Should I buy a separate flood and/or earthquake insurance policy? Flood coverage is available from the federal government’s National Flood Insurance Program (NFIP) and from a few private insurers. Earthquake coverage is usually available in the form of a supplemental policy.

6. Do I qualify for any discounts? Homes with smoke detectors, burglar alarms or dead-bolt locks often get a premium rate discount. Sophisticated sprinkler systems and alarms that ring at monitoring stations often reduce homeowners insurance premiums too. Ask an agent. If you are at least 55 years old and retired, for instance, you may qualify for a discount of up to 10 percent at some companies. If you have completely modernized your plumbing or electrical system recently, a few companies may provide a price break.

© 2012 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.

Citizens Decides Not to Push Expensive Replacement Cost Determination Method

TALLAHASSEE, Fla. – Jan. 23, 2012 – An issue discussed at the recent Florida Realtors Mid-Winter Meetings appears resolved, at least for now. Citizen’s Property Insurance Corp. – the state-owned insurer of last resort – relied on a single vendor, 360Value, to estimate a building’s replacement costs that, in turn, impact the amount of property insurance an owner had to buy.

A number of Realtors and homeowners, however, felt that 360Value overestimated replacement costs, forcing owners to overpay for insurance. Consequently – and in response to criticism from Florida Realtors, homeowners, the media and others – Citizens says it will now consider other sources when calculating replacement cost, including other software firms, appraisers, contractors and more.

“Florida Realtors has followed Citizens’ actions closely, and we discussed replacement costs at the recent Mid-Winter Business Meetings,” says Florida Realtors Senior Vice President of Public Policy John Sebree. “This issue is important to Realtors, homeowners and buyers, and we’re pleased with Citizens’ decision to expand replacement cost appraisals.”

As a state-owned insurer, Citizens cannot raise rates beyond 10 percent per year; but critics of the replacement cost appraisals claimed Citizens found a way to raise rates by skirting the yearly cap – simply force policyholders to buy more coverage than needed.

In response, Citizens said that wasn’t true, and that replacement cost differs from market value. Buying a foreclosed home, for example, many times costs less than the money it would take to build that same home.

The problem started in late 2010 when Citizens started to use 360Value exclusively. Homeowners could not get alternative appraisals if they disagreed with the values released by the vendor. Effective now, however, Citizens will still use data from 360Value, but it will also accept the following to calculate replacement costs:

• Estimates from other vendors, such as MSB and e2Value

• An appraisal from someone licensed to estimate insurance reconstruction costs, which can be different than market value

• A general contractor, architect or engineer estimate, providing it includes a contract price for reconstruction and an itemized list of features in the home

• A property inspection report, providing it’s been conducted within the previous 12 months

Citizens officials have not said how they will deal with past problems, however. Some owners balked when their insurance premiums went up based on new and higher replacement cost estimates, but they continued to pay the higher premiums anyway. Under the updated rules, it’s not clear if Citizens will make a new estimate retroactive, and, if so, whether a property owner can expect reimbursement for premiums already paid.

© 2012 Florida Realtors®

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

5 Insurance Mistakes Some Homeowners Make

NEW YORK – Jan. 5, 2012 – Many people make a New Year’s resolution to cut back on expenses, but according to the Insurance Information Institute (I.I.I.), there are smart ways to reduce insurance costs and some not-so-smart ways.

I.I.I issued the a list of top consumer mistakes followed by practical ways to trim costs:

1. Insuring a home for its real estate value instead of for the cost of rebuilding. With the real estate market in a slump and home prices down in parts of the country, some homeowners think they can reduce the amount of insurance on their home too, the I.I.I. says. But insurance is designed to cover the cost of rebuilding, not the sales price of a home. Make sure you have enough coverage to completely rebuild your home and replace all your belongings in the event of a disaster.

A better way to save: Raise your deductible. An increase from $500 to $1,000 could save up to 25 percent on your annual premium.

2. Selecting an insurance company by price alone. It’s a good idea to also make sure the company is financially sound and provides good customer service.

A better way to save: Check the financial health of a company through independent rating agencies, and ask friends and family for recommendations. You should select an insurance company that has a reputation for excellent customer service and will respond to your needs and handle claims fairly and efficiently.

3. Dropping flood insurance. Damage from flooding is not covered under standard homeowners and renters insurance policies. Coverage is available from the National Flood Insurance Program (NFIP) as well as from some private insurance companies. Many homeowners are unaware they are at risk for flooding, but in fact 25 percent of all flood losses occur in low risk areas.

A better way to save: Before purchasing a home check with the National Flood Insurance Program (NFIP) to see whether it’s located in a flood zone. (Some mortgage lenders require coverage, if so.) If you already own a home in a flood zone area, look at home mitigation efforts that can reduce the risk of flood damage and consider purchasing flood insurance.

4. Purchasing only the legally required amount of liability for your vehicle. In today’s litigious society, buying only the minimum amount of liability means you’re likely to pay more out-of-pocket if you are sued – and those costs may be steep. The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident.

A better way to save: Consider dropping collision and/or comprehensive coverage on older vehicles worth less than $1,000.

5. Not buying renters insurance. A renters insurance policy covers your possessions and additional living expenses if you have to move out of your home due to a disaster. Equally important: It provides liability protection in the event someone is injured in your home and decides to sue.

A better way to save: Look into multi-policy discounts. Buying several policies with the same insurer, such as renters, auto and life, generally provides savings.

© 2012 Florida Realtors®

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

National Flood Insurance Program gets 6 Month Extension

WASHINGTON – Dec. 19, 2011 – On Friday, Congress agreed to extend National Flood Insurance Program (NFIP) to May 31, 2012. It was part of H.R. 2055, a large spending appropriations bill that authorizes funding for a number of federal programs through the end of the fiscal year.

The U.S. House passed the bill on Friday, followed by the Senate on Saturday. To become law, it still needs President Obama’s signature, which is expected.

The National Association of Realtors® (NAR) ended its Call for Action intended to push Congress to extend flood insurance for five years. NAR says it will continue to push for a five-year extension before the program again expires in six months through H.R. 1309, a bill previously introduced in the U.S. House.

For updates on flood insurance extension, including information that the president signed the bill and it’s now law, refer to the NFIP website.

© 2011 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.

Image: FEMA

We Can Say Adios to the 2011 Hurricane Season - Not Much Excitement Here. Good!

Today, November 30th, is officially the "last day" of the 2011 Hurricane Season. Though possible, it is very unlikely that a hurricane will now cause us any harm since the Atlantic Ocean and the Gulf of Mexicao are cooling off after the summer heat. Hurricanes need very warm waters in order to get started.

We were fortunate again this year and had no major storms come our way. That was good news for sure. Funny though how most of our insurance rates did not drop and the insurance companies continue to cry poverty.

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 review your insurance coverage and find out what other insurance companies are charging for the same coverage you currently have. Now that the 2012 hurricane season is many months off, and the risk of damage is less, it might be possible to find new companies writing policies with 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?

Again, we are all glad to see the end of this year's hurricane season. Let's hope we have many more years with as little local action as we saw in 2011. No one would complain about that. Least of all, homeowners and real estate agents!

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.

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. Licensed in Florida.

Image from NOAA

Beware of Air-Conditioner Thieves in East Pasco County, Florida - They're Back!

One of my colleagues got a call from the neighbors of one his listings informing him that the external section of the central air-conditioning unit was missing. The worst thing is that the owners had paid over $4,000 for the new system just last spring! Now, a major component is gone!

In the past, thieves were after the copper tubing, or so we thought. Now it looks like they want entire exterior units. Perhaps to install somewhere else or to sell to a fence. Regardless of the motive, the owner is still stuck with the loss of a very expensive item.

The home I mentioned was vacant. The owners had left 2 weeks earlier. That creates a very attractive situation for people looking to steal items like this. They know that it is unlikely that they will get caught. Often the units are in the backyards of the homes or the neighbors assume that the thieves are workers making repairs. By the time that the realization hits that all is not well, the AC unit and the thieves are long gone.

The deputy who investigated the crime said that they were getting at least one call a day about this type of theft. He even said that while they were writing up one theft, they got a call concerning a similar crime just a few miles away. Amazing!

Even our office got hit a month ago. Over the weekend, some people tried to cut the electical cables to the AC unit on the roof of the building and make off with the equipment. Luckily, they were not successful as it turned out to be more problematic than they had thought. Nevertheless, they caused a lot of damage that cost "a pretty penny" to fix. Not to mention that we were without most of our power and all of our AC in the building for several days. Yuck!

So in the East Pasco area of Florida (and probably in other parts of the state and country as well) keep an eye on your exterior AC units and those of your neighbors. There is nothing like alert neighbors to discourage thieves from taking your property. This is especially true if your home is vacant. Make sure that friends and neighbors know you are gone and are watching out for your best interests.

It may also pay to check with your insurance company to make sure that you have adequate coverage when your home is vacant. Obviously, there is more risk when a home is vacant and your insurance company may want to know about it if it is. Just make sure that your claim, if you are robbed, is not declined for some overlooked reason. That would be a very expensive mistake! It never hurts to double-check.

If I can be of further assistance concerning real estate matters, please do not hesitate to call me at: JOHN ELWELL - REALTOR at CENTURY 21 Bill Nye Realty, Inc. 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com

Congress Passes Short-Term Extension for National Flood Insurance Program

WASHINGTON – Oct. 5, 2011 – Congress finally agreed on – and President Obama signed earlier today – a bill to extend the National Flood Insurance Program (NFIP) until Nov. 18, 2011. The move allows closings to go through if a mortgage lender requires flood insurance as a condition. However, it’s only a short-term solution.

“The National Association of Realtors® (NAR) is pleased that a continuing resolution passed by Congress … included a short-term extension of the National Flood Insurance Program,” says NAR President Ron Phipps. “But NAR still believes a longer-term extension is needed to ensure access to affordable flood insurance for millions of homeowners.”

Phipps asks Congress to pass a five-year NFIP extension.

“The NFIP was created because of the lack of available and affordable flood insurance in the private market, which remains true today, and serves as an alternative to expensive taxpayer-funded disaster relief for flood victims,” Phipps says. “The program writes and renews flood insurance policies for more than 5.6 million home and business owners in 21,000 communities across the country.”

Phipps also pushed for higher loan limits for mortgages guaranteed by Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA).

“The lack of mortgage availability is already a real concern, and lowering the loan limits will only further restrict liquidity for creditworthy homebuyers,” Phipps says.

© 2011 Florida Realtors®

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

Now Hurricane Irene Passes Haiti and Heads Toward Florida - But Might it Miss Us?

As of today, 8/22/2011, Hurricane Irene is passing over Dominica, and it has strengthened. The new projected path has it skidding along the eastern coast of Florida and then moving on up toward Georgia and South Carolina. If you compare the map to the left to the one I posted on Saturday, you will see how the projected path has shifted slightly to the east. For those of us in the Zephyrhills area that might be a good thing since the storm will lose strength as it goes over land and now it might just give us more of a "glancing blow". Perhaps more rain than anything.

You can click on the map to the left to see a larger view. Due note on the map that the letter "M" is on the storm's path once it gets by Cuba. From what I read on the Hurricane Center's page, this means "Major Hurricane" with wind speeds over 110 MPH. So while it may be further to the west, perhaps it will be a stronger storm than we had thought. It certainly bears watching! We will know for sure around 8 AM Friday if the current projections come to fruition.

Do keep in mind that it 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.

So far we have had a pretty quiet hurricane season with no major storms making landfall here. We do seem to be getting more rain than we normally do, but this very much resembles the weather patterns that took place all the time up until the late 1980's when a VERY long dry spell took place. So these nice showers are very welcome and have helped cut down on wildfires. The landscape around Zephyrhills sure is looking nice and green. And many are saving money on irrigation.

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.

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.

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

Image from NOAA