Insurance - Change in policy beginning Aug 15

[Smiling JOe]

This afternoon, I was told by a State Farm agent that beginning Aug 15, they will not be insuring homes within 5000 ft from the Gulf. Currently, there rule of thumb (or tape) is 2000 ft from the Gulf. The rule of 500' from the Bay will remain unchanged at this time. I am uncertain if other insurance companies will follow suit. Anyone heard reports of such from other companies.

I have also recently heard from second home owners in this area, that their insurance companies were dropping second-home policies in FL.

The State Farm agent also said that they were not isuing policies for homes older than those built in 2003, unless you had documents proving that the windows had been replaced with, or they met, today's standard. Even then, you would have to have multiple policies with State Farm or been a long term customer with them and have a few other policies.

I just asked to know some general and basic changes. I would hate to see the little stuff, too.

If anyone knows of changes from other companies, or more changes for S.F., please post them here.

 

[SHELLY]

My guess is maybe this may have something to do with it: ARTICLE: State panel decides not to order Panhandle to toughen its weak building codes


Insurance Companies (with the exception of Citizens) are in the "risk assessment" business--they've already stuck their hand into the flame once, they're not about to do it again. Just like "we the people" are getting the shaft from the insurers, the insurers are getting the same from "their reinsurers." Reinsurers are telling them to drop the risky stuff along the water, or they'll be paying dearly for reinsurance coverage which will shave off their profits from the "less risky" clients sitting in downtown Orlando.

I read that in 2007 Citizens is going to drop $1million+ homes and non-homestead properties from the roles...we'll see how that turns out.

 

[Bob]

My guess is maybe this may have something to do with it: ARTICLE: State panel decides not to order Panhandle to toughen its weak building codes


Insurance Companies (with the exception of Citizens) are in the "risk assessment" business--they've already stuck their hand into the flame once, they're not about to do it again. Just like "we the people" are getting the shaft from the insurers, the insurers are getting the same from "their reinsurers." Reinsurers are telling them to drop the risky stuff along the water, or they'll be paying dearly for reinsurance coverage which will shave off their profits from the "less risky" clients sitting in downtown Orlando.

I read that in 2007 Citizens is going to drop $1million+ homes and non-homestead properties from the roles...we'll see how that turns out.

Hey now! O'town had 3 hurricanes in '04. Pick another venue.

 

[SHELLY]

Hey now! O'town had 3 hurricanes in '04. Pick another venue.

The folks in Orlando are getting hosed when it comes to insurance also...BUT...the developers/builders in Orlando didn't get the "wink and nod" that the panhandle builders got that allow them to build flimsy hurricane magnets.

The reinsurance guys sitting over in Switzerland don't care if "your house" in SoWal was built to withstand a direct hit from a Hezbollah Katyusha rocket, all they know is that panhandle builders have always had the greenlight to put up tar paper and chicken wire shacks within spittin' distance of the Gulf and they're going to pay out dearly at the first incidence of a stiff tropical breeze.

We'll see what happens when the group meets to decide on this in a few days:
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"In the Panhandle counties, however, a lower standard is permitted. It's based on projections of 130 mph or greater, and just 1 mile from the coast. Supporters of the lower standard say the Panhandle has more protection from inland forests and is less likely to be in the path of major hurricanes.

In July, Mr. McCarty argued that the Panhandle's weaker codes are a deterrent to attracting the insurance and reinsurance industries at a time when more competition, not less, is important for rate stabilization.

While it's true that the weaker codes reduce the cost of construction, it's a short-term savings at best, at least for consumers. Florida already is in the midst of a property insurance crisis, and weaker building codes that discourage insurers from doing business in an already risky market can only make things worse."
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Now that the housing industry is down for the count anyway, I don't think they'll be able to hold this off any longer...the next sound you hear is the cost of building a home in the panhandle going up....and if you think this is going to lower the cost of insurance?...well, think again. (The insurance folks are pretty generous when it comes to campaign donations ;-) )

 

[TooFarTampa]

Most of the 30-A area homes are within 1-mile of the coast, and thus the Miami-Dade building codes enacted in mid-2002 would still apply as they do elsewhere in the state, correct? I believe the "more lax Panhandle standards" is something from way back that does not affect most of the South Walton homes being built now or in the past few years purely because they are located so close to the water and thus must follow the state codes. SHELLY I think you are painting with too broad a brush here if we are talking about South Walton homes.

 

[SHELLY]

SHELLY I think you are painting with too broad a brush here if we are talking about South Walton homes.

When it comes to putting a price on "risk"--reinsurers paint areas with a broad brush...and that "brush" appears to be the size of the state of Florida, (which includes South Walton).

The insurance companies can point to anything to justify their prices. They're crying the blues over the high cost of reinsurance and the reinsurers are saying they are charging higher prices due to the higher risk: I guess we can say "It's an Insurer's Market."

Being a State Farm client, I'm not exactly pleased with where I see this thing going--but I pretty much saw this trainwreck coming for some time now.

 

[Lisa Ruby]

Have to be honest, I thought State Farm exited nwf homeowner's market long ago....

I've had to replace coverage this year on a commercial building, a 100 year old historic home in Defuniak, and a 2001 Sowal home. Albiet challenging, I was able to find coverage on all three. Overall prices increase from last year, about 30%....should the trend continue, something will definitely have to go!!

My insurance "queen" (she actually returns phone calls) tells me this week that they are definitely running out of options. It seems it is the reinsurers that are cutting off underwriting, and the few companies still taking new policies this year are new companies, not rated by the state.

 

[TooFarTampa]

When it comes to putting a price on "risk"--reinsurers paint areas with a broad brush...and that "brush" appears to be the size of the state of Florida, (which includes South Walton).

I agree with you here. I believe that in most cases with most insurers the rates are not actuarily sound and somewhat random regardless of actual "risk." Even Citizens will not be required to be actuarily sound until 2008. The reinsurers are even worse as far as painting things with a broad brush. I don't see any genius solutions out there either ... it is ugly.

I just didn't want people reading this to believe that because they own a Panhandle property, it has been subject to less stringent building codes. All the homes permitted since mid-2002 (I can't remember the date) within 1 mile of the coast are subject to those Miami-Dade building codes, and owners should seek any ounce of credit they can get when "shopping" for insurance (not that there is much choice these days).

 

[Smiling JOe]

TFT, I believe you are correct in stating that most of the homes along 30A are within one mile of the Gulf, however, there are plenty of homes in SoWal which are located beyond one mile from the Gulf.

The big kicker in this State Farm change is that they are no longer insuring homes within 5,000 ft from the Gulf, beginning this Tuesday.

 

[TooFarTampa]

The big kicker in this State Farm change is that they are no longer insuring homes within 5,000 ft from the Gulf, beginning this Tuesday.

You're right, and it sure seems unfair that they are not distinguishing newer, well built homes from older structures. I wonder how Alys Beach residents are faring with insurance? Are they finding they are getting decent rates or not?