Florida insurance controversies

[SHELLY]

It is. But it's a politically popular form of discrimination.

People who own second homes in Florida are perceived by the general public as being "rich". It is considered by many to be only fair for the "rich" to not just pay more but to actually pay higher rates for things like insurance and taxes in order to subsidize everyone else.

And please don't bother to jump on and post about how owning a second home does not make you rich. I already know that. I'm not the one you need to convince.

"Rich" as in the eyes of a person living in a FEMA trailer?

 

[TooFarTampa]

That's a proposal by Citizen's--Florida State's insurer of last resort.

Since the state is tapping ALL Florida homeowers (regardless of insurance company) to pay an additional 6% (and another 10% later on) to pull this dog out of the ditch AND they are proposing to divert some of our state's revenue (funds that should go to roads and schools) for good measure--they don't want to give the impression that we're substidizing the costs of someone's (especially out-of-staters) investment properties.

Shelly, Citizens calls itself the insurer of last resort, but as we all know for many inland and coastal properties it is the ONLY available insurer. It is no longer an accurate moniker by any means.

Jeb Bush has proposed a one-time Citizens bailout so homeowners won't have to pay next year's 10 percent surcharge. Read that yesterday in the St. Pete Times. He will only do that on the condition that the laws change to make coverage and rates more fair and to bring in more insurers to balance things out. It makes sense to me. I would MUCH rather see a Citizens bailout than some other tax break or the silly sales tax holiday again. It just makes more fiscal sense. Reset the darn thing and make it work from here on out.

 

[TooFarTampa]

I have not heard that, but it is an interesting thing to look into.

Typically in the past, second homes were less expensive to insure. I ask my agent about that and he said less valuables are in second homes than in primary residences. THAT made sense to me.

But, nothing the insurance companies do anymore holds much logic.

That is an interesting point Yippie. Our primary residence and our beach investment property would cost approximately the same to rebuild, if you take market factors into consideration. But I guarantee you the stuff inside our primary home is worth 10 times that of what is in the rental house.

 

[SlowMovin]

"Rich" as in the eyes of a person living in a FEMA trailer?

I'm not following you. What exactly is your question?

 

[TooFarTampa]

"Rich" as in the eyes of a person living in a FEMA trailer?

There is no doubt it's all relative. That's why the only fair way to do things is ... well, structure the rates fairly. As I've said, that's what actuaries are for. Discrimination is discrimination, no matter how you slice it.

 

[SHELLY]

I'm not following you. What exactly is your question?

It's rhetorical.

 

[SHELLY]

Jeb Bush has proposed a one-time Citizens bailout so homeowners won't have to pay next year's 10 percent surcharge. Read that yesterday in the St. Pete Times. He will only do that on the condition that the laws change to make coverage and rates more fair and to bring in more insurers to balance things out. It makes sense to me. I would MUCH rather see a Citizens bailout than some other tax break or the silly sales tax holiday again. It just makes more fiscal sense. Reset the darn thing and make it work from here on out.

I agree on your view of the "sales tax holiday." And if only given the choice between two I would get more benefit from not taking another 10% hit on my homeowners.

The horserace is on for Citizens to keep upping their premiums so they are always the "highest cost carrier in the state" now that all their "spin-off business" are asking for rate increases:
Four Home Insurers Requesting Rate Increases

 

[SHELLY]

This "insurance" crap keeps getting deeper and deeper. Now they're considering "dinging" our life, health and auto policies! Hurry up baby boomers...get your butts and wallets down here and help us pay for this mess!

"Floridians face 10 years of payments to replenish insurance catastrophe fund
By Kathy Bushouse
South Florida Sun-Sentinel
Posted April 6 2006


TALLAHASSEE ? Two years of catastrophic hurricane seasons have drained the state's insurance industry, and now the reserve fund that backs up the insurers is $1.55 billion in the hole.

That means virtually all Floridians could pay for as long as 10 years to cover the fund's shortfall.

This is the first time the Florida Hurricane Catastrophe Fund, created in the wake of 1992's Hurricane Andrew, has run out of cash. And the state now is expected to take the unprecedented step of selling special bonds to raise money for home insurers to pay 2005 hurricane property damage claims.

People likely will pay an extra charge on their home, health, life and automobile policies to pay off the bond issue.

How much people would have to pay is unclear. The estimate is an annual charge of no more than 1 percent, or about $10 per $1,000 of the premium, on each of their insurance policies, said Jack Nicholson, the catastrophe fund's senior manager. Only medical malpractice and worker compensation policyholders would be exempt."

 

[ecopal]

The following is an interesting article about how those that choose to live in high risk flood prone areas are being subsidized by taxpayers.

It also presents ideas for correcting that problem.

Rethinking Flood Insurance
Washington Post
Wednesday, September 21, 2005; Page A22

http://www.washingtonpost.com/wp-dyn/content/article/2005/09/20/AR2005092001509.html

the following are excerpts:

".... The theory of the program is that people who choose to live in areas prone to flooding should pay for that risk by buying insurance; they should not expect taxpayers around the country to rescue them from their own recklessness. ......

In a vain attempt to persuade homeowners to buy coverage, the current system is subsidized; this allows people to build houses in exposed locations and then collect a federal check when the inevitable occurs, sometimes repeatedly.

By pricing flood insurance accurately, the government would create price signals that would drive housing development to higher, drier land.

Those who remain determined to live below sea level or
on the beach -- or developers who put up low-income rental units in these places -- would pay the full cost of their preference...

Compulsory, fully priced insurance would in theory achieve the best of all worlds: It would ensure flood victims of compensation, it would protect taxpayers and it would deter risky construction......"

 

[TooFarTampa]

Question: What parts of 30-A are actually in a flood zone? Our house in Seacrest Beach is 30 feet high and certainly isn't. Our lot in Seagrove is just under 30 feet elevation and certainly isn't. I'm not sure that article is entirely relevant to the situation of most property owners in SoWal, because it seems like so few are required to carry flood insurance. Parts of Grayton? Gulf front owners?

We carry it on our house in Seacrest -- just in case -- and it is a paltry $317 a year. Our wind insurance is 10x that. I'm not sure you can argue that our flood insurance is artificially low because only a direct hit by a catastrophic storm is likely to flood our home. Of course we are 150 yards from the water. I imagine it is different for those on the dunes or one or two lots in.