Florida Real Estate Blog

State CAN Suspend Allstate From Writing New Policies - Florida Courts Say

As some of you may remember, a couple of months ago I reported that Allstate had refused to produce documentation that the State of Florida had requested. Therefore, the state told Allstate that it could no longer write any new insurance policies in Florida, including auto and life insurance coverage. Allstate appealed and a court temporarily stopped the state's move.

Now the courts have told the state Office of Insurance Regulation that it CAN prohibit Allstate and its subsidiaries in Florida from writing new policies until it produces the documents that the state has demanded of it. Allstate says it is doing all it can (yeah, right). If the company produces the requested documents, they can return to their business of issuing new policies.

Since insurance reform was legislated over a year ago, many companies have been either foot dragging, looking for loop-holes in the law, or just continuing to request huge rate increases. To many of my customers and me, it appears that the reform laws have had little effect on protecting the consumers here in Florida. Perhaps this latest round will make a few of them toe-the-line, at least a bit.

The suspension applies to Allstate Floridian Insurance Co., Allstate Indemnity Co., Allstate Property & Casualty Insurance Co., Allstate Insurance Co., Allstate Floridian Indemnity Co., Allstate Fire and Casualty Insurance Co., Encompass Insurance Co. of America Encompass Indemnity Co., Encompass Floridian Insurance Co., and Encompass Floridian Indemnity Co.

In a related topic, some state legislators are talking of taking $250,000,000 from Citizen's reserve fund to help encourage new insurance companies to start up in the state. This is a loan, not a permanent withdrawl from Citizen's coffers. At this point it is too soon to say if this proposed legislation will make its way into law, but we will keep a watch on it to see how it fares. More companies, and therefore more competition and consumer choices, might not be bad things for us to have here.

For more information or questions about this topic please call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com

I also invite you to visit my my website where I think you will find a lot of useful information. To get there just click on the following link: www.jelwell.century21bnr.com

Smaller Insurance Companies Taking the Places of Some of the Bigger Players in Florida

I have heard reports and have also heard similar information from local insurance agents, that Citizens Property Insurance and other larger companies are losing some of their business to smaller underwriters that are beginning to do business in the state. Though for some properties, Citizens may still be the only option. It is good to hear that other companies may provide consumers with more choices when they are looking for coverage for their homes.

Citizens growth had been rapid up until last fall. However, in February of this year it was reported that they were covering 9% less properties than they were in the autumn of 2007. They had lost much of this business to smaller Florida-based companies.

Some of these newer companies only insure properties that are worth over $1,000,000. Others only will take properties that were formerly customers of Citizens. And others prefer to market their products in the mainstream marketplace.

So if you are looking for a new company to cover your property, you may want to do some searching and see what options are available to you.

A few of the newer companies are: Edison Insurance, American Integrity Insurance, Privilege Underwriters Reciprocal Exchange or PURE ($1,000,000+), and American Strategic Insurance.  As the length of time from last hurricane landfall in Florida lengthens, we may see more companies enter the market here. Let's hope so. We have received little loyalty or price breaks from the so-called "big boys" like State Farm and Allstate. Let's see if the local crowd can serve us better.

For more information or questions about this topic please call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com

I also invite you to visit my my website where I think you will find a lot of useful information. To get there just click on the following link: www.jelwell.century21bnr.com

Allstate Can Again Write All Types of Policies. At Least For Now.

A District Court of Appeal reversed a decision of the Florida Office of Insurance Regulation that Allstate could not write any more policies in the state, including auto and life insurance polices until it complied with the state's demand for documents. Since last Thursday they were dead in the water.

The state can appeal the court's decision within 10 days, but may do so sooner. The state certainly got the company's attention. A spokesman for Allstate all but said that word-for-word. Let's hope that they do not get away with their lack of cooperation. The state wants them to prove why they have not cut rates as required by laws that were passed A YEAR ago. I would like to know that too, as I am sure would many of you.

So for now the Good Hands people can continue to do business. Just make sure those hands (or those of any other insurance company for that matter) are not reaching into your pockets more deeply than they should.

For more information or questions about this topic please call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com

I also invite you to visit my my website where I think you will find a lot of useful information. To get there just click on the following link: www.jelwell.century21bnr.com

Good Hands Company Gets Its Hands Slapped - Allstate Can No Longer Write Any New Policies in Florida

Today the Florida Insurance Commissioner told Allstate Insurance that it can no longer write any new policies in Florida. Not just homeowners policies (which they almost never did and usually charged an arm-and-a-leg for) but also life insurance and car insurance policies. These last are cash cows for the company and according to an Allstate spokesman I heard on the TV, this action "Finally got Allstate's attention".

Well, about time! These companies have been cherry picking the best policies and leaving the others without coverage. Apparently this time Allstate had asked for a 40%+ increase to cover past losses and to prepare for future losses. The state asked for documentation which Allstate failed to produce. The commission said that those few documents that were submitted had pages missing and he wondered what the company was attempting to hide. Makes you wonder doesn't it.

In any case, the commissioner had had enough of this runaround and read Allstate the riot act. Until they clean up their act, they will be doing no new business here in Florida. Existing policy holders are not supposed to be affected by this action, only those individuals who try to get new policies to insure their homes, cars, or lives.

My guess is that the other insurance companies here in Florida may see that the lion does indeed have some teeth. Unless the state backs down. What has finally happened, in my opinion, is that the voters are so fed up that the politicians no have to ignore all of the insurance lobbiests and listen to those people who can vote them out of office. They are our employees afterall. In the coming weeks 4 other major insurers are supposed to present materials demanded by the commission. Any bets on whether they comply? I am betting they take the hint and show up like "good little boys and girls" with their homework done.

Let's see how all of this plays out.

For more information or questions about this topic please call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com

I also invite you to visit my my website where I think you will find a lot of useful information. To get there just click on the following link: www.jelwell.century21bnr.com

Allstate Insurance Companies Denied Rate Increases in Florida

As you may have read in an earlier post, several insurance companies were still asking for rate increases despite the fact that last January reforms were implemented that were supposed to LOWER rates for consumers.

Regulators here have finally let Allstate Insurance speak its piece, and finally turned a deaf-ear to them. The company was denied premium increases that reportedly ranged from 30% to over 40%!

A company spokesman said that they had saved some money by purchasing cheaper re-insurance that is now available from the state, but that the savings did not give them enough money to cover "worst case scenarios". Gosh, I am already tearing up here. This year there was NO worst case scenario here in Florida. And remember, most of these companies like to have local subsidiaries so they can cry poverty if a hurricane hits. So where is all that premium money going that they have not had to pay out this year? One would think that it would be invested safely to cover just those worst case scenarios that the company is so worried about.

Many of my customers tell me that Allstate is one of the most expensive companies in the state of Florida, and I have seen some surveys that would appear to support their comments. I am also reading that now several other states, like California with its recent wildfires, are now getting treated badly by the insurance companies.

Allstate can appeal the rate denial.

For more information or questions about this topic please call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com

I also invite you to visit my website where I think you will find a lot of useful information. To get there just click on the following link: www.jelwell.century21bnr.com 

Insurance Premium Increase - This Time From the State of Florida!

Starting in March of 2008 most insurance policies in the state of Florida will carry a 2% surcharge. The money generated by this will be used to pay claims of policy holders from four insurance companies that went out of business after our rash of hurricanes in the years 2004 and 2005. This surcharge will even apply to customers of Citizens Property Insurance Corporation, the state operated insurer. Previously they had been exempt from paying surcharges.

The companies that failed were Atlantic Preferred, Southern Family Insurance, Florida Preferred, and Vanguard. The first three were owned by Poe Financial Group which was based in Tampa.

The surcharge is supposed to be a one-time assessment at this time, and a total of $315,000,000 is expected to be raised by its imposition.

Florida's Office of Insurance Regulation Issues Subpoenas

Insurance reforms enacted last winter were supposed to provide homeowners in Florida with lower premium payments. In many cases this has not taken place. One provision of the reforms allowed the companies to have easier and cheaper access to reinsurance from the state. This is less costly than buying it on the private back-up insurance market. In return for buying cheaper reinsurance, the companies were supposed to pass the savings on to consumers. However, now many companies are asking the state to approve increases!

Very recently Allstate Floridian asked for a 41.9% increase and Allstate Florida Indemnity asked for 28.3%.

The state's Office of Insurance Regulation has issued subpoenas to the Allstate Insurance companies operating in Florida, as well as Cincinatti Insurance and Cincinatti Indemnity to find out why predicted savings have not materialized. Both Cincinatti companies asked for an average 37.5% increase.

The state regulators would also like to learn any insurance companies are in anyway working together to get-around the reforms that were enacted.

It was noted that several smaller companies based in Florida have complied with the laws and have lowered their rates. It appears that it is the bigger companies that feel they do not have to play by the rules.

And so the seemingly never-ending insurance saga continues.

Florida Insurance Regulators Reject Rate Hike by USAA

A rate hike by USAA, a company that insures military personnel, was rejected by the Florida insurance regulators. The company had been asking for a nearly 54% increase in premium rates. They said this was necessary to cover future losses. They also said that reinsurance (insurance that insurance companies buy to protect themselves from big losses) now cost more. I thought that the reforms put in place last winter were supposed to make reinsurance more available and cheaper. Go figure.

The rejection was partly due to the fact that the company officers had not certified that the information they had submitted was "true and accurate", as required by the Office of Insurance Regulation. Apparently in the past they could just shove figures at the state and then claim they were unaware of any errors in the data. Now they must attest under oath that the information they are giving is correct, or face perjury charges.

So this rejection may be based on a simple technicality. It will be interesting to see what the state allows them to do if they submit the request correctly. However, 54% is a huge increase and seems to fly in the fact of the insurance reforms that we were promised. Starting to look like business as usual, as far as insurance is concerned in Florida.

PS Dave Snowden of USAA has left a comment for this post with more information. Click on the comment link below to read what he had to say.

For more information or questions about this topic please call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com

I also invite you to visit my my website where I think you will find a lot of useful information. To get there just click on the following link: www.jelwell.century21bnr.com

State Farm to Cut Floridians' Premiums by 9%

It is being reported that State Farm Insurance Company has finally reached an agreement with the State of Florida concerning rate cuts and other business practices. The gist of this agreement is:

• State Farm will cut its rates 2% more in addition to the 7% reduction it made this summer.
• The company can no longer cancel policies just because the homeowner does not also get auto insurance or life insurance from State Farm.

Many policy holders should receive a refund since the initial reduction of 7% was not sufficient in the state's eyes. So that further 2% reduction is apparently retroactive, and that over payment is to be refunded, from what I read. Imagine that, an insurance company giving customers some money back!

State regulators are getting miffed at the insurance companies and want to know why they are not passing on the savings they receive from having easier access to back-up coverage from the Florida Hurricane Catastophe Fund. In many cases, these companies who are paying less for reinsurance coverage are in fact asking for rate increases.

At least with this latest surrender by State Farm, the largest property insurer in the state, the other companies will hopefully get the message that the government and the citizens of Florida have had ENOUGH!

For more information or questions about this topic please call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com

I also invite you to visit my my website where I think you will find a lot of useful information. To get there just click on the following link: www.jelwell.century21bnr.com

National Association of REALTORs Encourages Expansion of Flood Insurance Program

WASHINGTON, October 02, 2007 -

In testimony today before the Senate Banking Committee, the National Association of Realtors® expressed support for reforming and expanding the National Flood Insurance Program. The NFIP helps protect homeowners, renters and commercial property owners from losses sustained from flooding.

Since its creation, the NFIP has helped reduce the escalating costs of repairing flood-related damage to homes, buildings and contents in participating communities. “A strong real estate market is the linchpin of a healthy economy,” said NAR President Pat V. Combs, of Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt. “To ensure that real estate continues to be a good long-term investment and maintain vitality in the residential and commercial markets, certain safeguards must be in place, including federally backed flood insurance made available through the NFIP.”

The NFIP is a unique partnership between local, state and federal governments. It allows participating communities to purchase insurance as protection against flood losses in exchange for state and community floodplain management regulations that would reduce future flood damage. In exchange, the NFIP makes federally backed flood insurance available to homeowners, renters and business owners in these communities. More than 20,000 communities currently are participating in the NFIP.

Testifying on NAR’s behalf, 2006 California Association of Realtors® President Vince Malta said, “The NFIP is a win-win in that it promotes responsibility by homeowners, the community and the government. Compliance with NFIP building standards resulted in nearly 80 percent less damage annually. In addition, the cost of flood damage was reduced by nearly $1 billion because communities are implementing sound floodplain management requirements and property owners are purchasing flood insurance.”

NAR supports reforms that protect the integrity of NFIP by fully funding existing and future obligations to policyholders, increasing awareness of flood risks through consumer education and outreach, and ensuring that the 100-year floodplain maps are updated quickly. NAR also believes that any NFIP reform measure should include mitigation measures for severe repetitive loss properties.

NAR encouraged Congress to strike a balance between ensuring the long-term fiscal viability of the NFIP while avoiding changes that may result in market inequities and housing affordability problems, especially for low- and moderate-income homeowners and renters.

Before taking any future action to eliminate the existing subsidy, Congress must thoroughly analyze the impacts of eliminating subsidies on homeowners, renters and local economies. “Eliminating subsidies would result in higher flood premiums, increase the cost of property ownership and rents in these areas and could lead to further foreclosures and reduced property values,” said Malta.

“It is critical that flood insurance remain accessible for all individuals who own or rent property in a floodplain. We urge the Senate to move forward to enact a comprehensive policy that protects not only homeowners, but also all taxpayers, because proactive planning resulting cost savings. We look forward to working with Congress in implementing this important legislation,” Malta said.

Source: National Association of REALTORS

Florida Association of Insurance Agents Warns of Citizen's Shortcomings

The Florida Association of Insurance Agents (FAIA) has come out with a caveat for those homeowners who use the services of Citizens Property Insurance. They warn that coverage for personal items is limited to 50% of the home's worth, coverage for liability is capped $200,000, medical payments can't exceed $2,000, etc.

This kind of sounds like "sour grapes" to me. The mainstream companies will not write policies here, yet their trade organization is critizing the one company that will insure anyone. I do not feel that these statements by FAIA are aimed at all Floridians. For example, I am pretty sure they do not want to insure many mobile homes or older conventional houses. Citizens is still the only hope for many of these.

The insurance companies have often been accused of "cherry picking", taking the best homes and leaving the rest to fend for themselves. I think what has happened is that some of the "cherries" feel they are getting a better deal from the reformed Citizens, and now the conventional companies are losing customers. To try to get them back they are tossing rocks at Citizens, right from the front porch of the "Glass House" they live in.

In any case. each homeowner has to make his or her own decisions regarding insurance. Just make sure you have all the facts. I am no big fan of Citizens, but am suspicious when the big insurance companies start taking potshots at that company.

If you would like to download the FAIA statement you can do so by clicking on the following link: Download FINALCitizensPolicyCoverage9-26

For more information or questions about this topic please call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com

I also invite you to visit my my website where I think you will find a lot of useful information. To get there just click on the following link: www.jelwell.century21bnr.com 

Florida Insurers Not Giving The Reductions That Had Been Expected

Last winter in a special session of the Florida legislature, certain reforms were put in place that were supposed to offer policy holders some relief from the huge premium increases that we had been experiencing in the past years.

It is now being reported by the state that the property insurance rates have not dropped as much as they were supposed to. My own policy remained unchanged from last year. $1,700 for a home of less than 800 square feet!

One cause is that the companies are raising their profit rates. Another factor is that the companies are not passing on to consumers the savings they are reaping from their ability to buy cheaper re-insurance from the state or other companies. The legislature had said that any money that was saved due to this ability was to be used to cut rates to customers. Apparently this is not happening.

A spokesman for the Consumer Federation of America said that the smaller companies and those based in Florida seemed to be doing a better job of reducing their premiums. It appears that it is the large companies that cannot seem to give up their greedy ways and are looking for ways to get around the new legislation. This same spokesman went on to say that the insurance companies nationwide made $525 for every man, woman, and child in the United States during the past 3 years, even after paying off the large claims from hurricane damage. Does that sound like the companies are headed for bankruptcy? It sure doesn't to me.

By September 30, all insurance companies are to submit "true-up" filings, but so far only about one-third have done so. Surprise, surprise!

I am not sure we are going to see any true reform in this area in the near future. I think it is going to take a lot of pressure from the citizenry of the state to pressure Tallahassee to get off its proverbial behind and create some laws that have some teeth in them. Some of the companies are behaving like spoiled brats and it is about time their ears got boxed. On the other side, it would be great to see some of the smaller and local companies who are adhering to the law get some rewards for their efforts. At least some recognition by the state would be a start.

In any case, it would not hurt for you to let your state legislators and the governor know what you think about this apparent fiasco.

For more information or questions about this topic please call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com

I also invite you to visit my my website where I think you will find a lot of useful information. To get there just click on the following link: www.jelwell.century21bnr.com 

Florida Insurance Commissioner Denies Hartford's Rate Increase Request

TALLAHASSEE, Fla. (09/12/2007) - Florida Insurance Commissioner Kevin McCarty today announced the denial of eight rate filings submitted by insurance companies of The Hartford Financial Services Group. The filings submitted were not actuarially justified and lacked supporting information.
 
The Office of Insurance Regulation (Office) sent Notices of Intent to deny the rate filings, because the proposed rate increase was not commensurate with the savings obtained through the expansion of state-funded reinsurance supplied by House Bill 1A. Reinsurance is the insurance that companies buy to cover large losses.
 
"I am committed to ensuring that insurance companies doing business in Florida are offering policyholders the best rates possible," said McCarty. "The rates proposed by The Hartford are not in line with this objective."
 
The decision to deny the rate increases followed an Aug. 16 public hearing in which the Office questioned various aspects of the rate filings. Click here to view the video of the public hearing.

 

Companies have until Sept. 30 to submit their final reduced rate filings mandated by the law, and the Office will continue to review each one to ensure they are complete and reflect the policyholder savings ordered by the Legislature.
 
The Commissioner has the authority to hold a public hearing to question a company about its filing pursuant to Florida law. The schedule of upcoming public rate hearings and the television schedule to see them are located on the Office's Web site at http://www.floir.com/pcfr/RateHearings.htm.
 
Click here to read the Notices of Intent to deny the rate filings.

SOURCE: Florida Insurance Commission Press Release

Lots of Support for a National Catastrophe Fund, But Bush Blocks the Way!

During the 1990's I had the pleasure of living in Spain. There they have National Health Care and from a broken toe to a heart transplant you are covered and pay practically nothing for treatment. No worries about losing everything due to any type of illness. You could also get private health insurance policies. These were more for convenience and could get you a private room, save you time, etc. Their cost was $50 per month! Why so low? Because they did not cover catastrophic health issues. If you had a broken leg, hernia, pregnancy,  or other every day problem, they would cover it. If you needed cancer treatment or a kidney tranplant, for examples, the National Health Care would take over. That kept premiums very low. Bet you cannot find a private health insurance company in the US for just $50 per month.

Now let's swing over to property insurance. Here in Florida and around the country our rates are going higher and higher while service is dropping like a stone. Add to that the fact that companies are dropping customers left-and-right, and you have some serious problems with our insurance system in this country.

Many state governments, US Senators & Representatives, civic groups, trade associations, city governments, and the National Association of Insurance Commissioners have been calling for a National Catastrophe Fund that would be tapped when a disaster took place somewhere in our country. This would allow insurance companies to lower rates since severe situations would be at least partially covered money from this fund. As it is, when a hurricane hits a state, the companies try to recover the funds they pay out by raising the rates of customers, usually in the very state where the disaster took place and whose residents are least able to handle rate increases.

The federal fund would spread the risk over the greatest pool possible, that being the entire country. It is unlikely that major disasters would hit all parts of the country at the same time. Thus this year the fund could help pay costs for a hurricane in Texas, next year an earthquake in California, and the following year wildfires in the Dakotas. That is how insurance works. You spread the risk as wide as you can so that the few people who have to make claims are covered by the premiums of the majority that get through the year with no problems.

Sounds like a pretty good idea to me. So what is the hold-up? The stiffest opposition comes from the Bush administration. A spokesman said a fund like this one would "interfere with well-functioning private insurance markets". What are those? They sure aren't functioning very well in Florida, unless you count their abiliity to raise rates or run for the border. The administration also said the fund would push out private insurers and encourage people to build in earthquake and hurricane prone areas, and would put more people in harms way. Well, charge them a higher premium then.

When hearing the spokesmans remarks, Rep. Ginny Brown Waite - Florida said if someone from the administration came to her district and said those things she did not think they would "get out of the room alive."  She went on to ask if the administration did not think people in Florida were paying enough for insurance already? I pay over $1,700 for a 700 sq ft concrete block home valued at $100,000. I pay enough I can assure you.

Could it be that some people are either not seeing things as they really are? Or could it be that they have some friends in the insurance sector who do not favor any tampering with their free-for-all approach? In any case a catastrophic fund seems a long way away.

If you feel strongly about this issue, I suggest you not only contact your state representatives, but also your US Senators and Representatives. And do not leave out the White House. That seems to be our biggest obstacle at this point in time.

You can find your Florida representatives at: Florida Legislature

You can find your US Representative at:  United States House of Representatives

You can find your US Senator at:  US Senate

You can contact the White House at:  The White House

This is an important issue for many current and future homeowners. Take the opportunity to let your ideas be heard. Remember, often the squeaky wheel does get the grease, and all of these government people are OUR employees. They are supposed to work for US!

 

Nationwide Insurance to Dump More Policy Holders in Florida

Yesterday Nationwide Insurance announced that to limit their exposure to risk in Florida they were going to begin cancelling the policies of 39,000 homeowners and 1,600 commercial policy holders. They said they were forced to do this to "ensure long-term stability for Nationwide's customers, agents and associates."

Their plans will unfold in the following manner:

Nationwide will not renew approximately 39,000 homeowner policies and 1,600 commercial policies.

Policies affected by this decision will begin non-renewing in January 2008.

Nationwide will begin notifying policy holders in September 2007.

Nationwide will continue to provide coverage for more than 176,000 personal lines property policies after implementing the announced reductions.

The company says that most of the affected homeowners will be offered coverage with Security First Insurance.

So what happened to insurance reform?? My bill is just as high as ever. Since the start of the year the State Farm and Allstate Floridian have been non-renewing large numbers of policies. And many of those insurance companies that submitted mandated reductions are now asking that those reductions be lessened. Boo, hoo. The companies that are now able to buy cheaper reinsurance from the state were supposed to pass those savings on to the consumers, but few if any of us have seen these savings.

And we have to wonder if property tax reform will turn out any better????

For more information or questions about this topic please call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com 

I also invite you to visit my website: www.jelwell.century21bnr.com

Two Florida Property Insurance Companies Withdraw Their Requests For Rate Increases

TALLAHASSEE (08/17/2007) - The Florida Office of Insurance Regulation (Office) announced today that AMEX Assurance Company and IDS Property Casualty Insurance Company withdrew their filings. The companies had requested a 49.1 percent rate increase for their homeowners' insurance lines of business.

During 2006, the insurance industry pointed to the high cost of reinsurance for the ever-increasing residential property insurance rates. Reinsurance is the insurance companies buy to cover large losses. The Legislature responded during the January Special Session by passing House Bill 1A which expanded the Florida Catastrophe Fund, making $12 billion in less expensive reinsurance available from the state. In March, companies submitted rate filings to the Office estimating how much this lower-priced reinsurance would reduce their rates. AMEX and IDS each filed a reduction of -26.1 percent.

The law also required all companies to make a second filing, after they negotiated their 2007 reinsurance coverage, which shows the actual savings. AMEX and IDS indicated their rate reduction of -26.1 percent in March was incorrect and that each company instead requires a rate increase of 49.1 percent.

To date, two hearings have been held to evaluate the "true-up" filings, four more have been scheduled and two are in the process of being scheduled. The Office had scheduled the AMEX and IDS hearing for August 21; the Office canceled the hearing following the companies' decision to withdraw their filings.

The schedule of upcoming public rate hearings and the television schedule to view them are located on the Office's website at: http://www.floir.com/pcfr/RateHearings.htm

SOURCE: Florida Office of Insurance Regulation Press Release

Florida Rejects Proposed Rate Reductions of 3 Property Insurance Companies

TALLAHASSEE (08/14/2007) - This week, the Florida Office of Insurance Regulation denied the rate requests of three companies for not substantially lowering their property insurance rates pursuant to House Bill 1A.

"Governor Crist and the Legislature made some courageous decisions during the January Special Session," said Insurance Commissioner Kevin McCarty, "and we will not allow companies to file incomplete or inadequate rate reductions affecting the policyholders of this state."

The Office sent Notices of Intent to deny the rate filings because the reduced rates filed did not adequately reflect all of the savings realized when the state offered less expensive reinsurance to companies last spring.  Reinsurance is the insurance that companies buy to cover large losses.

"House Bill 1A made $12 billion of less expensive reinsurance available from the state, and the law requires the insurance companies to pass along that savings to their policyholders in the form of lower rates,"said McCarty.  "Not to be invested in extra, duplicative reinsurance contracts or profit margins."

Companies have until September 30th to submit their final reduced rate filings mandated by the law and the Office will continue to review each one to ensure they are complete and reflect the policyholder savings ordered by the Legislature.

Last week, the Office postponed a public hearing for State Farm Florida Insurance Company, State Farm Florida Fire and Casualty Insurance Company and State Farm Mutual Automobile Insurance Company. The Office issued subpoenas directing the three companies to appear in Tallahassee to answer questions about its business practices. The companies failed to provide all of the information requested in the subpoenas by the date set forth in the subpoenas; therefore, the Commissioner postponed the hearings until the requested information is provided in its entirety.

The Commissioner has the authority to hold a public hearing to question a company about their filing pursuant to Florida law. The schedule of upcoming public rate hearings and the television schedule to see them are located on the Office's website at http://www.floir.com/pcfr/RateHearings.htm.

More information on the companies' rate filings which were rejected is listed below.

Cypress Property & Casualty with 63,129 policy holders had proposed a -5.4% reduction.

First Floridian Auto & Home with 91,295 policy holders had proposed a -8.3% reduction.

Travelers Indemnity Co. of America with  4,596 policy holders had proposed a -8.3% reduction.

SOURCE: Florida Office of Insurance Regulation Press Release

State Farm Hearing Postponed Until Further Notice

TALLAHASSEE (08/10/2007) - Florida Insurance Commissioner Kevin McCarty has postponed the public hearing to be held on Tuesday, August 14, 2007 regarding recent underwriting decisions made by the State Farm companies conducting business in Florida. Subpoenas served on the companies for the upcoming hearing outlined the requirements for certain records to be produced for review by the Office of Insurance Regulation (Office) by close of business Wednesday, August 8, 2007.

The response and information produced by the companies Wednesday was insufficient to meet the requirements set forth by the subpoenas. More information is expected to be available from State Farm as was indicated in communication with the companies. The Office's legal staff is currently reviewing the matter to assure full compliance with the subpoenas and will be arranging another hearing date in the near future.

McCarty issued subpoenas in late July to State Farm Florida Insurance Company, State Farm Florida Fire and Casualty Insurance Company and State Farm Mutual Automobile Insurance Company, directing the three companies to appear at a public hearing in Tallahassee. The subpoenas served on State Farm require production of documents related to their recently filed non-renewal plans, multi-lines discounts, decision to withdraw from condominium business in Florida, and the impact these decisions may have on State Farm's rates.

Once rescheduled, the Office will issue another notice in the Florida Administrative Weekly, in a press release, and through an updated hearing agenda located on the Office's website: http://www.floir.com/pcfr/RateHearings.htm#otherhearings

The hearing will be open to the public, and input from interested parties will be welcomed.  The hearing will be taped by the Florida Channel and video will be available online shortly after the hearing at http://www.floir.com/pcfr/RateHearingVideo.htm#OtherHearings. Those unable to attend the public hearing are welcome to forward comments to the Office at ratehearings@fldfs.com.  The subject lines of the emails should read State Farm Hearing.

For more information or questions about this topic please call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com 

SOURCE: FLOIR Press Release

Florida's Citizens Property Insurance Company Offers a Brochure to Help You Protect Your Home and Possibly Reduce Premiums

Citizens Property Insurance Company has prepared a brochure that contains information that may be helpful to Florida residents. Citizens is the largest insurer of homes in our state and recent legislation has expanded its market sector greatly. Older homes and many mobile homes have no other alternative than to get their coverage from Citizens.

To download a copy of their brochure in PDF format, click on the following link: Download MitigationBrochure.pdf

Almost daily I hear of conventional insurance companies again asking for double digit increases in their premiums. I wonder what ever became of the insurance reforms of January 2007 that were supposed to reduce our costs. Looks like the companies are using the new laws to make more money for themselves rather than save us some dough. They are screaming about their hurrican liabilities when no storm is even on the horizon and we have not been battered in several years. Oh well, did we really expect the government to fix the problem??? Does not give me much faith that the property tax reform will fare any better. Time will tell. Am not sure I want to hear that story.

OFFICE OF INSURANCE REGULATION DENIES FLORIDA FARM BUREAU’S REQUEST FOR RATE INCREASE

TALLAHASSEE (07/19/2007) - Florida Insurance Commissioner Kevin McCarty announced today that the Office of Insurance Regulation is denying Florida Farm Bureau's request to raise its rates by 30.3%. After receiving testimony from the company in a public hearing last week, and reviewing all previously submitted data seeking to justify the increase, the Office Florida Farm Bureau a Notice of Intent to disapprove the increase.

"What we discovered from the testimony at the hearing was that the company made a business decision to reinvest $6 million in added reinsurance rather than passing the savings on to their policyholders," McCarty said. Reinsurance is the insurance that companies buy to cover extreme losses.

"The intent of the law that came out of the January special legislative session was to give companies less expensive reinsurance from the state and to pass on that savings to their policyholders," McCarty added, "and Florida Farm Bureau's actions are clearly contrary to the intent of that law."

Another aspect of the special session legislation was a mandate that companies file with the Office their expected savings from getting less expensive reinsurance from the state. These presumed savings filings were submitted in March and since then, companies have negotiated reinsurance contracts for the 2007 hurricane season. They are required to make a second filing by September 30th indicating how close they were to their initial presumed savings. Florida Farm Bureau's March filing was an anticipated decrease of 24.9%. On May 10th however, they made a second filing requesting an increase of 30.3%.

Source: Florida Office of Insurance Regulation Press Release

Florida Now Has A State Site Where You Can Compare Insurance Rates

In an effort to help Floridians find affordable insurance coverage for their home, the state has set up a site where you can search and compare rates in all of our counties.  You will see what the rates should be for a typical Florida home. Considering that companies are still asking for rate increases, perhaps this new site will be a useful tool for many people living here. You can access this site by clicking here:  http://www.shopandcomparerates.com/  I have begun to lose faith that the state will ever get a handle on the insurance situation here, but it does not hurt to see what is available out there and compare it to what you are paying.

Of course the site comes with a disclaimer "The typical rates quoted here are not guaranteed rates, but are only intended to demonstrate that rates vary significantly from company to company".

5 Florida Insurance Companies AGAIN Ask for Double-Digit Rate Increases

I just have received word that 5 insurance companies in this state are requesting double-digit rate increases for a variety of reasons. Auto Owners, Cincinnati Insurance, Florida Farm, Hartford, and Metropolitan Property and Casualty are the companies involved so far. Can others be far behind? The state has to approve any increases. Wasn't insurance reform supposed to stop or slow this. So far I have seen no impact on my customers. Let's hope that the property tax reform that was recently approved does not go down the same path.

I will let you know if I hear any more news on this issue.

COMMISSIONER MCCARTY (Florida) ORDERS INSURER TO REFUND $43.2 MILLION TO CUSTOMERS

TALLAHASSEE (06/15/2007) - Florida Insurance Commissioner Kevin McCarty issued a Consent Order requiring United Property & Casualty Insurance Company to refund millions of dollars in unapproved homeowners' insurance rate increases.

Last October, United began charging its customers higher insurance rates before the Florida Office of Insurance Regulation officially approved the rate increase. This was allowed under Florida law at that time and was referred to as a "use and file" rate increase.

However, the law also stated that if, after the Office reviewed the increase and determined that it was too high, the Office had the authority to require the company to return to policyholders the difference between the original rate charged and the rate ultimately approved by the Office. In this case, the difference between the amount charged and the amount approved is $43,249,714.

"Recent legislation in Florida prohibits property insurers from using use and file rates in the future, but United engaged in this action last year before it was banned," McCarty said. "We will continue to aggressively pursue all refunds and credits that are due to Florida consumers."

The Consent Order requires United to begin refunding immediately.

SOURCE: Press Release from the Office of Insurance Regulation

Governor Crist Extends Insurance Premium Rate Freeze

I am hearing that Governor Crist has extended the freeze that he signed several months ago that prevents Citizens Property Insurance (the so-called, insurer of last resort in Florida) from raising the rates it charges their customers for homeowner coverage. Instead of doing this by executive order, he accomplished it by signing a bill into law. The freeze on Citizen's rates will remain in effect until the end of 2008. This bill also forbids large national companies from forming companies just within the state of Florida, and then claiming they are losing money since they are not spreading the risk over ALL of their customers in all 50 states, or wherever it does business outside of Florida. In the past when a hurricane hit Florida, they reported horrible losses and asked for huge rate increases, even though everywhere else in the country they were raking in the dough. No more of that. The bill will also require that before national companies ask for a rate increase, they must factor in all the money they are making nationwide.

New Companies to Accept New Homeowners Insurance Policies in Florida

The state is reporting that five new companies will begin writing policies in Florida. For months we have seen an exodus of insurers, and perhaps it is a positive sign that some are now entering our market.

Clearwater's Modern USA Insurance Company will begin writing coverage in October for homes that have average values of $210,000.

Olympus Insurance Company out of Orlando will begin offering coverage sometime around October 2007.

American Keystone Insurance Company of Ponte Verda Beach will offer policies on homes valued from $250,000 to $3,000,000.

Plantation's Privilege Underwriters Reciprocal Exchange, Inc. will handle homes valued at more than $1,000,000.

The last company, Homeowners Choice Property & Casualty Insurance Company will take over 10,000 policies now serviced by Citizens (the state run company). Near the end of this year they will accept new customers and hope to sell up to 25,000 new policies on homes valued between $150,000 and $750,000.

A sixth company, Sawgrass Mutual Insurance Company out of Hollywood, Florida has also applied to be able to sell homeowner policies in the state.

These additional companies will at least offer us more options. It is unclear whether in the end they will offer us cheaper prices. Time will tell. But the fact that companies are coming to Florida is a positive sign. Now we just have to hope we have a calm hurricane season so that they are not driven back out of the state.

Citizens Property Insurance Now Free to Expand and Directly Compete With Other Companies

During the recent session of the Florida Legislature the role of Citizens Property Insurance was expanded and rates were frozen until the year 2009. It is hoped that since now Citizens can compete directly with other insurance companies and will no longer be the "insurer of last resort", other companies will be encouraged to lower their premiums rather than lose customers. The downside of all of this is that Citizens will be able to levy surcharges on property and automobile insurance policies that people already have with other companies if Citizens should run a deficit at some future point in time. This has already happened in the past when we had an extra fee added to our regular premiums to cover the cost overruns of Citizens.

Time will tell if this will turn out well. It would be nice if we could get through a few more seasons without a major hurricane so that the company can get on more solid financial ground before having to pay out the vast sums that a direct hit can require. With insurance premiums climbing ever higher, Floridians are willing to give any reasonable plan a try. Let's hope that one of the times the people in Tallahassee get it right.

Hurricane Season Will Soon Be Here In Florida! Do Not Wait To Get Insurance!

Here in Florida we will soon be entering our hurricane season. Typically this runs from June 1st to November 30th of each year. Though the experts attempt to predict  how many storms will hit us and how severe they will be, there is no way of being 100% sure. Now is the time to be thinking about getting insurance and/or reviewing the policy you currently have to ensure that you have adequate coverage.

Be aware that once a hurricane warning or watch is declared for any part of the state, the insurance companies will stop writing policies until the danger is past. Otherwise, it would be kind of like calling your insurance agent to get coverage for your boat as it is sinking into the lake. Insurance companies frown on that. So if you already own a home, take a moment to review your current coverage to make sure it covers your property adequately. Remember, in the past years it is likely that your home has increased in value, and you need to be sure that your policy addresses that.

If you are going to be buying a home during the hurricane season, make sure that your purchase contract has wording to protect you if you are unable to get insurance due to an impending storm. The contract I use was created by the Florida Association of REALTORS (FAR). Its wording says, "If on Closing Date insurance underwriting is suspended, Buyer may postpone closing up to 5 days after the insurance suspension is lifted." Using this contract you would not be forced to close on the specified closing date if you were unable to get insurance due to an insurance suspension caused by a hurricane. The last thing you would want is to close on an uninsured home with a hurricane bearing down on it! I am not sure if the contracts available in office supply stores have such wording. States that are not normally affected by hurricanes may also not have this language in their contracts. Read your contract carefully and consult an attorney if you have any doubts about this issue.

Keep in mind that flood insurance is not a part of your standard policies. If you live in a flood prone area you may wish to see what it would cost to get flood protection coverage. It may not be as expensive as you think. If you are not sure if you are in a flood zone in Pasco or Hillsborough Counties you can get the instructions for finding this information from your county property appraiser by reading my previous posts on December 30, 2006 for Pasco County and January 14, 2007 for Hillsborough County. The maps they show are NOT as accurate as a survey, but they can give you an idea of whether or not you need to investigate your home's location and risk in more detail.

Nationwide Is On Your Side? Don't Bet On It In Florida!

For weeks people in Florida have been talking about recent legislative action that was supposed to lower premiums for homeowners here in Zephyrhills, Pasco County, and the rest of the State of Florida. First, we learned that the promised price reductions were probably not going to be as great as we were led to believe. Now it is being reported that Nationwide Insurance will in fact be raising its rates an average of 54% throughout the state. That will be a nasty surprise to many homeowners whose rates are already high even without that type of price hike.

This is apparently what happened. Last summer Nationwide asked for a 71% increase. That was denied, so they went to arbitration with the state. Now the arbitrators have said that they can have an average 54% increase. Note the word "average". Some increases could be much higher. Since the arbitration was started before the recently enacted new regulations, the state cannot deny this increase. The newly passed laws forbid any more arbitrations until 2009, but that does not affect this last hurrah that had begun before the laws went into effect. This could affect many Floridians since Nationwide is one of the largest insurers in the state.

Nationwide has proposed that they only reduce their premiums under the new laws by about 4.5%. Nice of them to raise their premiums 54% then reduce them by just 4.5%!! The state is challenging Nationwide's very small reduction.

Governor Crist has pointed out that when Nationwide made their initial rate hike request and then went to arbitration Jeb Bush was still in office. He still believes that people in Florida will see "Rates decline significantly". "I guarantee it", said Governor Crist recently.

Makes one wonder if getting some relief from high insurance premiums isn't a lot like searching for a snowman on Miami Beach!

Florida Insurance Department Adds a New Webpage So Floridians Can See How New Regulations Will Affect Their Premiums

TALLAHASSEE (03/15/2007) The Florida Office of Insurance Regulation (Office) today announced it has added a new page to its website that allows Floridians to view adjustments to their premiums based on recent insurer filings.  The rate changes are required by the new property insurance reform law.  The web page will allow consumers to view the amount of the new rate cuts and is available at http://www.floir.com/PresumedFactor/Report1.pdf.  Legislation passed during the recent Special Session of the Florida Legislature required the Office to calculate the Presumed Factors to estimate cost savings for consumers living in various regions of the state. "Floridians are anxious to see how the reforms will affect them, and we want this process to be as transparent as possible," stated Insurance Commissioner Kevin McCarty.  "This web-page enables policyholders to see the potential savings."              

It is important for the public to understand these are average savings.  The discounts in region 1, which contains zip codes from North Florida and the Panhandle, could average 10.2 percent of the total policy premium.   The discounts could increase to an average of 52.8 percent of the total policy premium in region 25, which contains zip codes from Miami-Dade.  When the insurer's filing is approved, policyholders can work with their agent to determine the exact savings based on their particular circumstances.             

Commissioner McCarty cautioned that some insurers have not yet filed or have filings in process.  Policyholders who do not see their insurance company on the webpage should not be concerned, as the webpage will be updated as additional information becomes available.  The Commissioner also reminded Floridians that all insurers are required submit a second "reconciliation" filing by September 30, 2007 when all reinsurance arrangements have been finalized. If insurance companies have underestimated the potential savings, they will be required to provide an additional discount following this "true-up" filing.

Property Insurers In Florida Lower Rates, But Not As Much As We Were Promised

Due to legislation that was enacted during a special session of the Florida legislature a couple of months ago, we were told that we would see average homeowner insurance rate decreases of about 23%. However, just a few days ago several companies announced their reductions would be far less than the predictions. Allstate Floridian says theirs will be 14.2%, State Farm just 7%, and Nationwide only 4.5%. Whoopee!!! Some smaller companies will hit the target of 23% or surpass it. Unfortunately the majority of the insurers with coverage from the conventional companies are with the largest ones, and therefore will see smaller decreases. Supposedly the state regulators must review and approve the rates that the companies are requesting. Governor Crist says that at least one new company is interested in writing policies in Florida, up to a level of $100,000,000. He feels that this is because the new legislation has made it more profitable to insure homes here. Guess time will tell. But I am one Floridian that is not holding his breath.

This is not the only disappointing news to come out of Tallahassee. Several large companies have announced that they will continue to stop renewing policies when they come up for renewal. They were "kind enough" to say that they were going to let policyholders know far in advance so they could find other coverage. Isn't that nice of them?? Only State Farm said they were not going to drop coverage based on increased hurricane risk.

In another development, the federal government is working on a catastrophic fund that would help cover damage when a natural disaster takes place, such as a hurricane, flood, earthquake, etc. There is a similar fund here in Florida, but it does not appear to be doing much to ease our insurance woes. Perhaps a federal program will work better.

Florida Governor Freezes Property Insurance Rates and Prevents Cancellations and Non-Renewals of Policies

Today Governor Crist issued an emergency order that stops property insurance companies from cancelling policies, rejecting renewals of policies, and raising their premiums. Apparently he was afraid that the companies that issue policies in Florida would try to get around the new legislation that was created by the Florida Legislature and signed into law by the Governor last week. Wonder what would make him think that they would do that??? (I am being sarcastic there) Evidently State Farm was already thinking of rejecting renewals for 40,000 homeowners near the coast.

Again the insurance companies are pleading poverty and saying they cannot handle the hurricanes. However, we have had at least a couple of years with no damage at all, and still they have been raising their premiums like crazy. Mine went up over 100% in just one year! Sorry insurance companies, do not try using Hurricane Katrina and New Orleans as an excuse. Remember you have your own little companies here in Florida that you use to prove your case for raising rates. Not fair to then use an out-of-state storm as evidence. Cannot have it both ways guys.

This order by the Governor will be effective for 90 days, or until such time that the insurance commisioner and his crew decide what rates will be under the recently passed legislation. This law will also permit the Governor to freeze things again in June, just when the hurricane season is about to begin.

It will be interesting to see how things go from here. At the very least, it appears that our elected officials have finally come to realize that the citizens of Florida are at the end of their ropes!

Florida Insurance Reform Bill Signed by Governor Crist

The reform package that the Florida legislature passed last week during a special legislative session has now been signed by the governor. Insurance companies are of course whining. What a surprise! It will be interesting to see how they react, and if these reforms will translate into more reasonable premiums for homeowners and businesses. Apparently it will take a few months before the full effect of these laws will be felt by citizens of Florida. Time will tell I guess.

To see what the legislation is supposed to do, check out my posting on January 22 for more details.

In the meantime, keep your fingers crossed. Let us know if you feel positive or negative effects from these reforms in the months to come.

Insurance Reforms Pass in Florida Legislature and Go To Governor Crist

The Florida legislature met in a special session last week and has passed laws meant to reform the property insurance industry in our state, and hopefully get homeowners out of the crisis where we currently find ourselves. More and more of my customers here in Zephyrhills, Dade City, and the rest of East Pasco County are asking me to write purchase agreements with insurance premium limits in them. I was speaking with one of my sellers on Saturday, and she told me that the new home she will be buying may have a yearly premium of $6,000! Unbelievable! Things certainly could not continue down this path for long.

The legislature decided the following:

• Insurers will have easier access to the state's Hurricane Catastrophe Fund. This in a sense offers them cheaper reinsurance than they could buy from private companies. It is my understanding that their loss limits can be lower in order to access these funds. The downside of this is that if we get really lambasted by a hurricane, or  hurricanes, and the f