Calm hurricane season over, but rocky waters ahead for Florida insurance scene

Gray Rohrer, 11/27/2013 – 02:04 PM

Saturday marks the last day of one of the mildest hurricane seasons on record, both in terms of named storms and legislative action on property insurance issues. The calm seas, though, belie an undercurrent of turbulence for homeowners.

Many homes in coastal areas face skyrocketing flood insurance premiums starting next year, and some are having trouble selling their homes because of federal legislation tagging next year’sNational Flood Insurance Program rate increases to home sales and other title transfers.

State lawmakers have pledged to find a state-based alternative to the NFIP if private companies don’t step in to offer cheaper flood coverage. There are signs private companies are looking into the market, and the Office of Insurance Regulation has set out guidelines for writing the new business and promised to fast-track review of new filings. The process, though, is likely to take longer than affected homeowners would need to avoid rate shock next year.

In addition to the new flood issue, lawmakers are likely to contend with state entities designed to stabilize the market: Citizens Property Insurance Corp. and the Florida Hurricane Catastrophe Fund, or Cat Fund.

Citizens marked the eighth straight year without major hurricane damage in the state, and with $6.8 billion in surplus the 11-year-old company is in its best-ever financial shape. But the company has moved to that position by pushing customers into the private market, drawing the ire of critics who say the new companies aren’t as financially stable.

Citizens’ total policies have dropped by 312,550 this year, down to 1,062,191. The company remains the largest property insurer in the state, however, covering $330.8 billion worth of property.

“Mother Nature has been kind and again spared Florida from a major storm. Here at Citizens, we have been busy taking advantage of that good fortune by continuing to reduce our exposure and policy count,” Citizens president and CEO Barry Gilway said.

Legislative action related to Citizens may hinge on the progress of the clearinghouse, designed to come online Jan. 2 and designed to shop new and renewal Citizens customers in the private market.

But lawmakers who have been pushing for Citizens rates to rise faster — they have a 10 percent cap on annual rate hikes, except for noncatastrophic sinkhole coverage — will continue to push for changes to the Cat Fund as well, despite the state reinsurance fund’s healthier financial outlook after the string of weak storm seasons.

After two straight years when its reserves and borrowing capacity wouldn’t have been enough to cover its liabilities, the new estimates show the Cat Fund has $12 billion in reserve and could borrow at least $6 billion — about $1 billion more than its maximum $17 billion coverage limit.

Still, free market advocates want more state reinsurance to be pushed into the private market. Lawmakers have resisted such changes in recent years, fearing the more expensive private reinsurance would push insurance rates higher.

“Now that the Cat Fund is at its healthiest, the time is right to shift some of that risk to the private market, so the Cat Fund is never again in a position where it is selling fake coverage,” Christian Camara, director of R Street Florida, a free market think tank, said last month when the latest Cat Fund estimate was released.

Florida Ban on Texting While Driving Now in Effect

By Gary Fineout | October 2, 2013

Florida is joining 40 other states in the U.S. where it is illegal to text and drive.

The ban is one of more than two dozen laws passed by the Republican-controlled Legislature scheduled that kicked in on Tuesday, Oct. 1.

The prohibition on texting while driving comes after several years of trying by legislators. Previous attempts stalled in the face of House Republican opposition, with conservative members worried about government intrusion into people’s lives.

Some have called the law “watered down” since it is only a secondary offense to read or send a text, email or instant message on a smartphone while driving. That means police have to first stop drivers for another offense like an illegal turn.

Sen. Nancy Detert, R-Venice and the sponsor of the legislation, says it will still act a deterrent — especially among teenagers just starting to drive.

“My whole purpose in the law is just to be able to tell teenagers that texting while driving is against the law,” said Detert, who planned to visit a Sarasota County high school to point out the new ban. “I’m not sure how many of them are going to pull down a copy of the Florida statutes.”

The Department of Highway Safety and Motor Vehicles also plans to target teenage drivers to remind them about the ban. The agency began running a public service announcement in 69 high schools across the state on Tuesday and will air it again on Oct. 15.

The Department of Transportation plans to remind drivers about the ban through its digital billboards along state highways.

Drivers who text take their eyes off the road for almost five seconds, according to the Federal Motor Carrier Safety Administration, which regulates the trucking industry. At 55 mph, a driver can cross the equivalent of a football field while not looking.

There were 256,443 reported crashes in Florida in 2012. In 4,841 of those crashes, a driver had been texting or otherwise using an “electronic communication device” while driving, according to a preliminary report from the Florida Department of Highway Safety and Motor Vehicles.

The ban covers tablet computers as well as mobile phones, but excludes using a talk-to-text feature. It also allows texting while stopped at a red light. A first violation is a $30 fine plus court costs. A second or subsequent violation within five years adds three points to the driver’s license and carries a $60 fine.

Mississippi Officials Mulling Suit to Delay Flood Rate Hikes


September 17, 2013 •

Mississippi Insurance Commissioner Mike Chaney (AP Photo/Rogelio V. Solis)Mississippi Insurance Commissioner Mike Chaney (AP Photo/Rogelio V. Solis)


Mississippi officials are discussing a lawsuit aimed at delaying the onset of flood insurance premium rate hikes before bills start going out Oct. 1.

State insurance commissioner Mike Chaney told a state Legislature Budget Committee hearing Monday that he and the state Attorney General’s “have been having discussions about filing the lawsuit.” Chaney said the suit, if filed, would be in Federal Court in a Gulf Coast state.

The lawsuit would seek an injunction based on allegation of illegal taking. Chaney said at the hearing that under the Biggert-Waters Act, rates for some homeowners will increase over 1500 percent for some Mississippi residents.

Mississippi was remapped in 2009 after Katrina, and Base Flood Elevations changed. “Many homes were rebuilt after Katrina to the then-existing flood elevations and are caught in new elevation requirements and new zones,” Chaney testified.

Chaney told the panel he and the attorney general are considering action because he does not think Congress will address the issue in a timely manner.

At several meetings, including comments to Gulf Coast insurance commissioners last Saturday, Chaney said, “This BW-12 act could end up generating another savings and loan crisis, like the eighties.”

A hearing on the issue will be held by the Senate Banking Committee Wednesday. Industry lobbyists say the House Financial Services Committee will hold a similar hearing Oct. 9.

Also Monday, Jackson County Mississippi supervisors passed a resolution voicing support for federal legislation that would delay the rate hikes. However, there appears to be little for legislation, the legislation that would be considered would only stop limited rate hikes scheduled to go into effect next year, and not the major rate hikes for which Write-Your-Own companies will start sending out bills starting Oct. 1.

At the meeting, the supervisors said that the rate hikes, ranging from hundreds of dollars a year to thousands of dollars a year on homes in flood-prone areas could cause people in middle- to low-income brackets to walk away from their homes. Moreover, there is a strong possibility that Congress will not act on legislation funding the government for the new fiscal year starting Oct. 1, thereby generating a government shutdown.

Earlier, GNO, Inc., the former Greater New Orleans Committee, called the rate hikes “harmful” in a new report. The group said a confluence of factors, including the rate hikes, incomplete and inaccurate FEMA maps, and questionable actuarial calculations will lead to premium increases of up to 3,000 percent and more – for policyholders who have built to code and never flooded.

The report said, “To be clear, GNO, Inc. is committed to a financially solvent NFIP and premiums that reflect true risk,” but the committe does “not support policies that create moral hazard by incentivizing building in harm’s way, nor do we support subsidization of severe repetitive loss properties.

“But there are hundreds of thousands of Americans who have done nothing wrong, have built exactly as the federal government has told them – and who now could have their lives destroyed,” the GNO said.

The report said that, “If unchecked, the negative consequences are broad: owners will lose everything, values of unsellable properties will plummet, bank mortgages will go into default, local tax bases will erode, and economies will be eviscerated.”

The report said GNO is “already seeing this negative spiral in St. Charles parish, where values on some homes have been lowered 30% by the assessor – an unprecedented action. Ultimately, this ‘cascade effect’ will undermine NFIP itself, as policyholders will leave an unaffordable program.”

Meanwhile, released a letter asking Congress to resist delaying the rate hikes.

“NFIP remains almost $28 billion in debt to U.S. taxpayers as a result of years of heavily subsidized premiums regardless of need,” the organization writes, adding detail of what is says are disproportionate benefits to the wealthy. “Forty-three percent of subsidized properties are located in counties that have average home values in the top 10 percent of the country.”

Commercial Property Owners

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Our commercial property owners insurance has been developed with your needs in mind. We offer cover for all types business of properties, whether you want to cover houses you rent out, shops you let, or even the location of your own business.
With our list of insurance providers, you can cover the cost of insuring your property against damage in the event of a disaster, such as a fire, flood, and even from less dramatic natural occurrences such as subsidence. It also covers against unforeseen accidents that cause damage to your property or its contents.
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What to Consider Before Making an Insurance Claim

Getting insurance to cover potential losses to your home, car or other belongings is not just smart, in many cases it’s the law. The good thing is you are covered in the event of a problem. The bad thing is how much it costs for the insurance.

Insurance is just that. It’s something you have just in case something happens. So when that something does happen, it’s time to make a claim, right? Well, not exactly. It’s not always that simple. There are some important factors to consider before you decide whether or not to file that claim.

For instance, you may not be ready to file a claim as soon as an incident occurs. Maybe you are waiting to see if the water in the basement has caused damage that isn’t showing up right away. You may be ready to do the clean up yourself thinking the problem is minor so it’s not worth making a claim.

But what happens if a few weeks or a month down the road, you notice mold starting to show up? If you wait too long to file a claim the insurance company may be hesitant to approve it. That’s because any delay in reporting the incident can hamper the insurance adjuster’s ability to investigate and assess loss and damage.

Can you prove that you ripped out carpet and threw out an older couch? Can you prove that you did everything you could to keep the damage to a minimum when the problem occurred?

At the very least, take pictures of the damage before you do any clean up and keep a careful record of anything that you threw out because of water damage. But even at that, you should contact your insurance agent to at least let him know about the incident, so it’s on record as to when it occurred.

By trying to avoid a claim you could even end up having the claim denied. The insurance company may be within their rights to do that on the grounds that they were prevented from properly dealing with the loss when it occurred. It’s unfortunate that there are times when not making a claim creates problems. So what can you do?

The bottom line is to consider carefully how serious the problem is right now while at the same time trying to decide if there is the potential for further problems in the future. If there is, it may be smarter to make a claim, so you are covered.