[font=Verdana,Arial]Oops, the article dissapeared, but this one is interesting, too.
Citizens Property Insurance: Builders to see big rate hikes[/font]
Citizens Property Insurance: Builders to see big rate hikes[/font]
[font=Verdana,Arial][font=Verdana,Arial]TALLAHASSEE, Fla. -- Aug. 16, 2006 -- Builders risk insurance, which covers real estate projects during the construction phase, is getting a lot more expensive.[/font]
[font=Verdana,Arial]Citizens Property Insurance Corp., the state-run insurer of last resort, has notified agents that, although it is continuing builders risk lines, the rate hike on wind-only coverage will average 150.6 percent statewide.[/font]
[font=Verdana,Arial]The rate hike becomes effective Oct. 1, for both new and renewal policies.[/font]
[font=Verdana,Arial]The increase will be less in South Florida, with Broward and Miami-Dade averaging rate hike increases of 82 percent, according to the Citizens website.[/font]
[font=Verdana,Arial]Calls to Citizens weren't returned on Monday.[/font]
[font=Verdana,Arial]Although the builders risk rate increases are steep, the policies should find a welcome market in South Florida's large construction industry, said Anita Byer, a Fort Lauderdale insurance agent. "There were certain risks that weren't getting coverage at all," she said.[/font]
[font=Verdana,Arial]Political football[/font]
[font=Verdana,Arial]The builders risk situation has been a political football for Citizens. In June, it announced it would discontinue the product as of July 15. The move came after the state's Office of Insurance Regulation questioned why Citizens offered the policies. It was determined that Citizens wasn't legally obligated to provide it.[/font]
[font=Verdana,Arial]But the move quickly became controversial because builders were unable to find replacement insurance with private carriers.[/font]
[font=Verdana,Arial]Citizens was then petitioned by Florida Insurance Commissioner Kevin McCarty and state Chief Financial Officer Tom Gallagher to reconsider, however.[/font]
[font=Verdana,Arial]Industry at peril[/font]
[font=Verdana,Arial]They argued that canceling builders risk insurance would put the construction industry -- one of the state's leading employers -- at peril.[/font]
[font=Verdana,Arial]"By allowing builders to obtain this insurance coverage, it will allow workers to stay on the job, and our economy can continue to grow," Gallagher, a candidate in the Republican gubernatorial race, said at the time.[/font]
[font=Verdana,Arial]On July 21, Citizens reversed its previous decision and said it would renew existing builders risk policies and write new ones at least through Dec. 31. However, the Citizens board said at the time that the carrier would need to adjust rates. Citizens has about 6,500 such policies in force, with about $4.5 billion in exposure. More than half of that coverage is in South Florida.[/font]
[font=Verdana,Arial]Copyright ? 2006 The Miami Herald, Gregg Fields. Distributed by McClatchy-Tribune Business News.[/font]
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