The Office of Insurance Regulation of the State of Florida released a statement about State Farm Insurance Company’s intent to leave the State of Florida. Commissioner Kevin McCarthy issued a consent order that ends the pending litigation between State Farm and the Insurance Commissioner’s office concerning State Farm’s plan to leave Florida’ property insurance market. State Farm will now continue writing business in Florida’s residential insurance market, and Citizens Property Insurance dodges a bullet that could have been fatal.
The Florida legislature established Citizens Property Insurance, the high risk pool, in 2002, in response to insurance companies that either went bankrupt, cancelled or pulled out of Florida because of repeated hurricanes. So, Citizens Property Insurance places the Florida taxpayers at risk for residential losses. Since 2002, storm after storm have struck Florida, nearly bankrupting Citizens. And Citizens is only one big storm away from ruin. So, when State Farm, the largest residential property insurer in Florida announced that they were leaving the state, the Insurance Commissioner’s office panicked.
This allowed State Farm to figuratively bend the Commissioner over the couch and have its way with him. Prior to State Farm’s announcement that they were leaving Florida, the company requested a rate increase of over 65% which was denied by the Commissioner. But rather than wave goodbye to Florida’s largest insurer, the Commissioner has granted the smaller...yet generous...rate increase of 14.8%. And, it is allowing State Farm to get rid of 125,000 policies that are arguably the highest risk policies they have on the books.
So, not only does State Farm get a rate increase on all policies, but it gets to keep its most profitable business and shove the riskier business off onto the taxpayers of the State of Florida. And for Citizens, 125,000 risky policies is better than 860,000.
You’ve got to admire that kind of moxy. State Farm, being the largest insurer in Florida, took full advantage of their market position and finally showed the State of Florida who is the boss. The regulators and the Florida legislature had little choice and no options but to give in to State Farm’s demands. The press release issued by the Commissioner’s office was a pitiful attempt to save face and spin the story to look like the Commish’s office was protecting Florida’s property owners.
Don’t you wonder if the terms of the consent order was what State Farm wanted all along?
Showing posts with label windstorm. Show all posts
Showing posts with label windstorm. Show all posts
Tuesday, February 2, 2010
Wednesday, April 22, 2009
Texas Windstorm Insurance: Insanity in the Texas Legislature
Representative John Smithee, (R) Amarillo, has introduced HB911, which would, if passed and signed by the governor, cause the price of windstorm insurance - required of all coastal property owners - to soar by as much as 60 percent. Additionally, it wouldn’t cover nearly as much and for certain properties, it would not be available at all.
Smithee is the Chairman of the House Committee on Insurance. He cites a need to replenish the Texas Windstorm Insurance Association, the state risk pool, after the onslaught of Hurricanes Katrina and Rita in 2005, and Ike in 2008. The Association became the only insurer available for millions of coastal Texans after many insurers pulled out of windstorm coverage after the hurricanes.
The Texas Windstorm Insurance Association currently carries 215,537 policies totaling $58.6 billion in exposure. According to a December 2008 Texas Windstorm Insurance Association status statement, 43,079 of those policies are in Nueces County, with a total exposure of $11.4 billion.
House Bill 911 would, among other things:*
• Assess windstorm insurance rates based on geographical location, meaning coastal residents would pay more than inland residents. Rates could go up 60 percent for current coastal policy holders.
• Require coastal homeowners to purchase federal flood coverage.
• Cap windstorm insurance coverage at $250,000 per residence (homestead), well below the current $1.7 million cap, leaving thousands of homes uninsurable to their current value.
• Exclude coverage for rent houses, second homes, condominiums, apartments or other multi-family units.
• Decrease the maximum coverage for commercial buildings from $4.1 million to $1 million.
• Decrease the maximum coverage for government structures, such as schools and courthouses, from $4.1 million to $2.1 million, meaning those entities would have to use tax dollars to purchase more expensive, private insurance, if it’s available, to make up the difference.
• Create a 60-day waiting period before losses could be sought, as opposed to current policy, which prevents new coverage once a hurricane is in the Gulf of Mexico.
*Source: House Bill 911 and an analysis from the Galveston Windstorm Action Committee Inc.
I have no problem with higher premiums for coastal policyholders. That is simply accurate underwriting. Happens in all types of insurance. But don’t be fooled. If rates go up at the coastal states, they will rise state-wide. Texas is a windy state.
But that’s where my agreements end. The rest of this bill is trash.
Here are the elements of the bill I oppose:
Caps on windstorm coverage - Don’t cap coverage, charge the proper premium amount for the risk.
Requiring coastal property owners to buy Federal Flood insurance - it’s tyranny to force a property owner to insure for flood. If the owners want to remain uninsured, it is their right. That doesn’t mean a lienholder could not require flood insurance as a requirement for a mortgage. But that is a collateral protection issue. The federal government does not have a security position in a homeowner’s property without some mortgage in place (Freddie Mac, Fannie Mae, VA loans, etc.) To require flood insurance is a violation of property rights.
Excluding coverage for non-homestead dwellings, rental homes, apartments and condos - what kind of idiocy is this? There are millions of second homes, rental houses, condos and apartment buildings in the 14 coastal Texas counties. How would making them uninsurable help the situation?
The 60-day “deductible.” Texas law now states that, once a hurricane or named storm enters the Gulf of Mexico, new coverage cannot be purchased. But those storms usually make landfall, if at all, within a few days. In addition, in the peak of the hurricane season, storms are seldom 60 days apart. Look at Katrina and Rita, about 30 days apart. This proposal hurts Texans.
Smithee is from Amarillo, a city over 650 miles from the Texas Gulf Coast. That’s a distance equal to the distance from New York to Charlotte, North Carolina. I know that’s somewhat obscure, but this nut case is a long way from the water. It illustrates just how far out of touch with reality he is.
So, if a bunch of insurers have stopped writing windstorm coverage in Texas, and the Texas Windstorm Insurance Association is the insurer of last resort for many Texans, where are they supposed to go to get insured to value?
This kind of legislative nonsense could bring the Coastal economies to a screeching halt. Lenders would stop lending on properties that could not be insured to value. Insureds with losses could lose everything.
Texans, both inland and coastal, need to bombard their elected representatives with their opinions on this very bad bill and demand that it be rejected.
In the film industry, there is the widely known name of Alan Smithee. It is an official pseudonym used by film directors who wish to disown a project because they were so disgusted with the final product. I can only hope that someone paints the name “Alan Smithee” on this horrid bill.
Smithee is the Chairman of the House Committee on Insurance. He cites a need to replenish the Texas Windstorm Insurance Association, the state risk pool, after the onslaught of Hurricanes Katrina and Rita in 2005, and Ike in 2008. The Association became the only insurer available for millions of coastal Texans after many insurers pulled out of windstorm coverage after the hurricanes.
The Texas Windstorm Insurance Association currently carries 215,537 policies totaling $58.6 billion in exposure. According to a December 2008 Texas Windstorm Insurance Association status statement, 43,079 of those policies are in Nueces County, with a total exposure of $11.4 billion.
House Bill 911 would, among other things:*
• Assess windstorm insurance rates based on geographical location, meaning coastal residents would pay more than inland residents. Rates could go up 60 percent for current coastal policy holders.
• Require coastal homeowners to purchase federal flood coverage.
• Cap windstorm insurance coverage at $250,000 per residence (homestead), well below the current $1.7 million cap, leaving thousands of homes uninsurable to their current value.
• Exclude coverage for rent houses, second homes, condominiums, apartments or other multi-family units.
• Decrease the maximum coverage for commercial buildings from $4.1 million to $1 million.
• Decrease the maximum coverage for government structures, such as schools and courthouses, from $4.1 million to $2.1 million, meaning those entities would have to use tax dollars to purchase more expensive, private insurance, if it’s available, to make up the difference.
• Create a 60-day waiting period before losses could be sought, as opposed to current policy, which prevents new coverage once a hurricane is in the Gulf of Mexico.
*Source: House Bill 911 and an analysis from the Galveston Windstorm Action Committee Inc.
I have no problem with higher premiums for coastal policyholders. That is simply accurate underwriting. Happens in all types of insurance. But don’t be fooled. If rates go up at the coastal states, they will rise state-wide. Texas is a windy state.
But that’s where my agreements end. The rest of this bill is trash.
Here are the elements of the bill I oppose:
Caps on windstorm coverage - Don’t cap coverage, charge the proper premium amount for the risk.
Requiring coastal property owners to buy Federal Flood insurance - it’s tyranny to force a property owner to insure for flood. If the owners want to remain uninsured, it is their right. That doesn’t mean a lienholder could not require flood insurance as a requirement for a mortgage. But that is a collateral protection issue. The federal government does not have a security position in a homeowner’s property without some mortgage in place (Freddie Mac, Fannie Mae, VA loans, etc.) To require flood insurance is a violation of property rights.
Excluding coverage for non-homestead dwellings, rental homes, apartments and condos - what kind of idiocy is this? There are millions of second homes, rental houses, condos and apartment buildings in the 14 coastal Texas counties. How would making them uninsurable help the situation?
The 60-day “deductible.” Texas law now states that, once a hurricane or named storm enters the Gulf of Mexico, new coverage cannot be purchased. But those storms usually make landfall, if at all, within a few days. In addition, in the peak of the hurricane season, storms are seldom 60 days apart. Look at Katrina and Rita, about 30 days apart. This proposal hurts Texans.
Smithee is from Amarillo, a city over 650 miles from the Texas Gulf Coast. That’s a distance equal to the distance from New York to Charlotte, North Carolina. I know that’s somewhat obscure, but this nut case is a long way from the water. It illustrates just how far out of touch with reality he is.
So, if a bunch of insurers have stopped writing windstorm coverage in Texas, and the Texas Windstorm Insurance Association is the insurer of last resort for many Texans, where are they supposed to go to get insured to value?
This kind of legislative nonsense could bring the Coastal economies to a screeching halt. Lenders would stop lending on properties that could not be insured to value. Insureds with losses could lose everything.
Texans, both inland and coastal, need to bombard their elected representatives with their opinions on this very bad bill and demand that it be rejected.
In the film industry, there is the widely known name of Alan Smithee. It is an official pseudonym used by film directors who wish to disown a project because they were so disgusted with the final product. I can only hope that someone paints the name “Alan Smithee” on this horrid bill.
Sunday, September 7, 2008
What is a CLUE Report, and Why Should You Care?
What's a CLUE Report, and why should you care? If you're buying or selling a property, you will care a lot.
You've searched for far too long, and you've finally found a house that you want to buy. You've fallen in love with this house and you're already dreaming of the ways you'll decorate it.
But, what if you found out that your dream house had suffered a major fire three years ago, and extensive repairs were required? Or what if you learned that the house was flooded and rebuilt? Would that change your opinion of your dream house? Not only that, would this new knowledge change the purchase price you would offer for the home? Could the damages cause an insurance company to charge you a higher premium for your homeowner's insurance?
Now, think about this situation. You live on a street of homes that are comparable in size and value to one another. Your house is one of four homes on your street for sale. All four are priced the same. However, one of the four homes on your street had a major fire and rebuild three years ago. Do you think that the value of the repaired home should be the same as yours?
That's why ChoiceTrust offers the C.L.U.E. Home Seller's Disclosure Report. "C.L.U.E." stands for Comprehensive Loss Underwriting Exchange, which is a database featuring loss information compiled by the insurance companies. A C.L.U.E. report provides a five-year history of losses that have been filed against insurance policies covering a given property. The report provides information including the dates and types of losses and the amounts paid for each loss.
It's a report that you purchase as the home seller. It can give prospective home buyers valuable information about losses associated with your home. Then the buyers can make an informed decision when buying your home. If the report shows prior claims, a buyer could ask for evidence that the damages were properly repaired.
A C.L.U.E. report that shows no losses can give you, the home seller, an advantage when your home is compared with similar properties.
Real Estate Agents: Ask the property seller for a C.L.U.E. Report! Furnishing loss information to a potential buyer that makes the home you are selling more attractive gives you a competitive advantage. When you order the C.L.U.E. Report at the time of listing, the smart seller and his/her smart agent are ready for buyers immediately.
Question: May I order a C.L.U.E. Report on a property I want to buy?
Answer: Sorry, you may not. Only property owners (business or individual) can access a consumer report like the C.L.U.E. Report.
Question: How may I obtain my own report?
Answer: Order from http://www.choicetrust.com, and you can view your report online immediately. The report only costs $19.50 per address. You can also order reports on properties that are not your primary residence, such as rental property or vacation homes.
If you are a home buyer you should require home sellers to provide a C.L.U.E. Report as a contingency to a purchase offer. Your best friend in your real estate purchase could be the C.L.U.E. Report.
P.S. I wrote a book that YOU need!
check out: http://www.insurance-claim-secrets.com
NUMBER ONE at Amazon.com in its category!
My blog is at: http://insurance-claim-secrets.blogspot.com/
Nominated for Georgia Author of the Year Award 2008
My philosophy: I give value first. I help other people. I strive
to be the best at what I love to do. I establish long-term
relationships with everyone. I have fun...
and I do that every day.
You've searched for far too long, and you've finally found a house that you want to buy. You've fallen in love with this house and you're already dreaming of the ways you'll decorate it.
But, what if you found out that your dream house had suffered a major fire three years ago, and extensive repairs were required? Or what if you learned that the house was flooded and rebuilt? Would that change your opinion of your dream house? Not only that, would this new knowledge change the purchase price you would offer for the home? Could the damages cause an insurance company to charge you a higher premium for your homeowner's insurance?
Now, think about this situation. You live on a street of homes that are comparable in size and value to one another. Your house is one of four homes on your street for sale. All four are priced the same. However, one of the four homes on your street had a major fire and rebuild three years ago. Do you think that the value of the repaired home should be the same as yours?
That's why ChoiceTrust offers the C.L.U.E. Home Seller's Disclosure Report. "C.L.U.E." stands for Comprehensive Loss Underwriting Exchange, which is a database featuring loss information compiled by the insurance companies. A C.L.U.E. report provides a five-year history of losses that have been filed against insurance policies covering a given property. The report provides information including the dates and types of losses and the amounts paid for each loss.
It's a report that you purchase as the home seller. It can give prospective home buyers valuable information about losses associated with your home. Then the buyers can make an informed decision when buying your home. If the report shows prior claims, a buyer could ask for evidence that the damages were properly repaired.
A C.L.U.E. report that shows no losses can give you, the home seller, an advantage when your home is compared with similar properties.
Real Estate Agents: Ask the property seller for a C.L.U.E. Report! Furnishing loss information to a potential buyer that makes the home you are selling more attractive gives you a competitive advantage. When you order the C.L.U.E. Report at the time of listing, the smart seller and his/her smart agent are ready for buyers immediately.
Question: May I order a C.L.U.E. Report on a property I want to buy?
Answer: Sorry, you may not. Only property owners (business or individual) can access a consumer report like the C.L.U.E. Report.
Question: How may I obtain my own report?
Answer: Order from http://www.choicetrust.com, and you can view your report online immediately. The report only costs $19.50 per address. You can also order reports on properties that are not your primary residence, such as rental property or vacation homes.
If you are a home buyer you should require home sellers to provide a C.L.U.E. Report as a contingency to a purchase offer. Your best friend in your real estate purchase could be the C.L.U.E. Report.
P.S. I wrote a book that YOU need!
check out: http://www.insurance-claim-secrets.com
NUMBER ONE at Amazon.com in its category!
My blog is at: http://insurance-claim-secrets.blogspot.com/
Nominated for Georgia Author of the Year Award 2008
My philosophy: I give value first. I help other people. I strive
to be the best at what I love to do. I establish long-term
relationships with everyone. I have fun...
and I do that every day.
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