This is not good news for the 100,000 plus Magnolia Insurance Company policyholders.  Magnolia Insurance Company is a take out Florida home insurance company that only recently started up in 2008.  In just two years it was permitted to assume thousands of South Florida home insurance policies that used to be in Citizens Property Insurance Corporation.

 Why exactly is Magnolia Insurance Company struggling financially?  While we may never know the complete answer, Magnolia Insurance Company has plenty in common with many other Florida home insurance companies who have lost money during the last 12 months in this tough economy.  Reasons for these losses can include inadequate Florida home insurance rates, poor returns on invested capital during a period of low interest rates, and rising claim levels – something that is particularly hard to understand in non-hurricane years.

 Whatever the reason for the situation at Magnolia Insurance Company things do not appear to be going well there.  Earlier this month the company lost its Demotech financial rating which makes them officially an unrated Florida homeowners insurance company – this is not exactly something you want your mortgage company to find out about.

Now Magnolia Insurance Company’s president has resigned and it is going to be operated by the State of Florida for the foreseeable future.  State officials have referred to Magnolia Insurance Company as “financially troubled” and stated that “it doesn’t have enough money”.

 Where exactly does this leave you as a Magnolia Insurance Policyholder?  Well it would be good for all of us in the State of Florida if the company was able to work through its problems and continue to insure its 100,000 policyholders.  But do you want to wait around to find out if they are going to make it?  What will your chances be of having your claim paid if we have a Florida hurricane again this year?  What if Magnolia Insurance Company has to be liquidated right before the start of hurricane season?

Don’t wait around to find out the ending of the Magnolia Insurance Company story.  Take action right now by subscribing to the Home Insurance Buyers Guide.  The buyers guide helps you find, screen, and contact Florida home insurance companies still writing new business in your county – companies that could save you thousands and keep you out of Citizens Property Insurance Corporation.

Take control of your own destiny and use the buyers guide to find affordable private Florida homeowners insurance today.

At the present time, they are coming in many shapes and sizes:

• Citizens Property Insurance is moving forward with multi-year rate increases in order to make their premiums more appropriate to the risks they accept.
• Private Florida home insurance companies are raising rates as well – many are getting double digit increases for the first time in several years.
• State Farm Florida recently received approval to eliminate certain discounts resulting in an effective Florida home insurance rate increase of 28%.
• Most Florida home insurance companies are moving forward with plans to re-inspect homes that might not qualify for certain discounts they are currently receiving.

So where does that leave you as a Florida home insurance consumer during these difficult economic times?  On the defensive as usual.

Here’s what you need to do to fight back against these Florida homeowners insurance rate increases:

• Shop your policy around with more than one Florida home insurance agent – it is the only way you can be sure to get a quote from every Florida home insurance company writing new business in your area.
• Decide on the minimum coverages you need in your Florida home insurance policy and make sure all of the Florida home insurance quotes you obtain have the same coverage.
• Don’t compromise on things like the value of of your home or a higher hurricane deductible – if you do a major Florida hurricane could wipe you out.
• Don’t assume that Citizens Property Insurance is your only option for a Florida home insurance policy.  It might not be.  New Florida home insurance companies are starting up all the time and there might be a company you don’t know about who wants to cover your home.
• Research each and every Florida homeowners insurance company that you are considering.  Don’t assume that each company you get a quote from will give you the same levels of fast and fair Florida insurance claim service.  And don’t assume that each Florida insurance company has the same ability to survive financially after the next Florida hurricane.  There is a very big difference among the companies and you will be sorry if you don’t shop around.

Last but not least, check out the Florida home insurance buyers guide located at:

www.homeinsurancebuyers.org

The buyers guide helps you find, screen, and contact Florida homeowners insurance companies still writing new business in the Florida county where you live.

When you use the Florida home insurance buyers guide you find out exactly who open for business in your county, what types of home they are looking for, and you get a buyers guide rating that helps you quickly narrow the field to the best Florida home insurance companies available in your area.

Don’t take these Florida home insurance rate increases lying down.  Check out the Florida home insurance buyers guide today.

Why?

Because most of the large, national, well capitalized Florida home insurance companies have all but left the market.

What is left for you as a consumer to consider is a very limited group of about 40 Florida homeowners insurance companies to consider.

Many of these Florida insurance companies have come into existence since the 2004/2004 Florida hurricanes.  So they tend to be small, have no prior Florida hurricane processing experience, and do not have much surplus cash available to pay Florida hurricane claims.  And since they are just starting up, they haven’t had any time to diverify their risk across both Florida and into other states.

What’s the best way to find a great Florida home insurance company?

Check out the Florida home insurance buyers guide located at:

www.homeinsurancebuyers.org

The buyers guide helps you find, screen, and contact Florida home insurance companies still writing new business in your Florida county.

The guide contains only those Florida home insurance companies still writing new business in your county.  These are private Florida home insurance companies that can keep you out of Citizens Property Insurance.

The guide also helps you to screen the companies by using a buyers guide rating that helps you stack rank each company and develop a short list of companies to consider.  It also provides you with high level underwriting guidelines so that you get a good idea of which Florida home insurance companies will cover an older home or a home near the Florida coast.  The Florida home insurance buyers guide makes it easy for you to figure out exactly who is interested in covering your Florida home.  And it provides you with the information you need to contact both the Florida home insurance companies and the Florida homeowners insurance agents who represent them.

Best of all, the home insurance buyers guide saves you thousands because it allows you to get a Florida homeowners quote from every company in your county considering your type of home.

In short the buyers guide will help make sure that you don’t miss a great Florida home insurance company interested in covering your home. 

That’s a risk you can’t afford to take during these difficult times.

This is not good news as State Farm Florida covers over 700,000 homes accross the State.

And there is a great deal of concern that when private Florida home insurance companies are unable to absorb these policies, that they will end up being dumped in Citizens Property Insurance.

If you are concerned about losing your Florida home insurance with State Farm Florida, visit the Florida home insurance buyers guide located at:

www.homeinsurancebuyers.org

The buyers guide helps you find, screen, and contact Florida home insurance companies still writing new business in your county.  The guide tells you exactly who is still writing private Florida homeowners insurance in your county, what type of homes these companies are covering, and information on how to contact them.  Best of all, this service assigns a buyers guide rating to each Florida home insurance company so you end up with a clear picure of which company is a better buy for your money.

If you’ve received a Florida home insurance cancellation notice from State Farm Florida, Allstate Insurance Florida, or Nationwide Insurance Company of Florida, check out the Florida home insurance buyers guide.  You’ll end up with the most Florida home insurance quotes and save thousands.

But what’s the best way to do that?

You could simply go on line and search for Florida home insurance quote generator websites.

 Or you could contact multiple Florida homeowners insurance agents.

If you use Florida home insurance quote generator websites you could run a high risk of missing out on Florida insurance companies who want to cover your home.  Why?  Because these websites sell your information to agents and companies willing to pay for them.  What if there is a Florida home insurance company out there interested in giving you a low cost Florida property insurance quote but not interested in paying the quote generator website for the lead?  Guess what?  You might never learn about that Florida homeowners insurance company.

If you work with a Florida home insurance agent, you might also miss out on Florida home insurance companies that want to cover your home.  Why?  Because the agent you contact might not represent one of the companies who would love an opportunity to give you a Florida home insurance quote.

So what’s the best way to get the most low cost Florida homeowners insurance quotes?

Simple.

Check out the Florida home insurance buyers guide located at:

www.homeinsurancebuyers.org

The buyers guide database helps you find, screen, and contact Florida home insurance companies still writing new business in your Florida county.

You save time because the guide gives you only those private Florida home insurance companies writing new business in your area – not a long list of Florida insurance companies that haven’t written a new policy in years.

You save money because quite frankly you decide if you want to get a Florida home insurance quote from each and every company writing new Florida home insurance business in your county.  You decide how much competition you want to create.  And when you are finished using the Florida home insurance buyers guide you have the comfort of knowing that you did your best to get multiple Florida home insurance quotes on your home.

Last but not least, the Florida homeowners insurance buyers guide gives you a simple Florida home insurance rating system that stack ranks each company against each other using the exact same criteria.  It is the only website that takes a clear position on which Florida home insurance company you should pick.

So the next time you are shopping for low cost Florida home insurance quotes, check out the Florida home insurance buyers guide.

That is, it is supposed to be the final option that you as a Florida homeowner would turn to for coverage if you are unable to find private Florida home insurance.

That’s good news if you can’t find a Florida home insurance company to cover your home, but can create significant problems for Citizens Insurance Florida as the dollar magnitude of the risk they are responsible for becomes too high.

Why?  Because Citizens has had difficulty charging enough premium to cover the risks that they are accepting.  That can lead to severe shortage of cash after a Florida hurricane - shortages that they have to cover by reaching out to the bond markets and/or by imposing special assessments on Florida homeowners.

So, it is good public policy to try to encourance Florida home insurance companies to take or assume policies out of Citizens Property Insurance Corporation.  This allows Citizens to send some of its risk back to the private market.

The challenge for you as a Florida homeowner on the receiving end of an offer from a Florida take out home insurance company is that there are many factors that make it difficult for you to decide whether to accept the offer:

• The company might offer a similar or lower price than Citizens Property Insurance but over time might raise rates significantly.
• Issues with the age of your home, roof type, construction materials, and hurricane mitigation features might trigger the need for a Florida home insurance inspection – something that might subject you to a massive rate increase.
• The company wanting to take your Florida property insurance policy might be brand new, thinly capitalized, with no experience responding to and paying Florida hurricane claims.

So the bottom line for you when trying to evaluate whether you should accept a Florida home insurance take out offer is that you can’t do enough due dilligence on the company support your decision.  And this may also be a good time for you to see if there is another private Florida home insurance company that might give you additonal options for getting out of Citizens Insurance Florida.

If you want to see if there are other Florida home insurance companies writing new business, check out the Florida home insurance buyers guide located at:

www.homeinsurancebuyers.org

This guide helps you find, screen, and contact Florida homeowners insurance companies still writing new business in your Florida county.

When you subscribe to the guide, you will quickly find out which Florida home insurance companies are interested in covering your home.  And you will be able to find out this information without having to contact multiple Florida home insurance agents.

If you are considering a Florida home insurance company take out offer, check out the home insurance buyers guide today.

It is the best way to get the most Florida home insurance quotes on your home.

Even though we survived 2009 without a major Florida hurricane, the day of reckoning has simply been postponed.

 Why?

Because the Florida Property Insurance market continues to rest on a shaky foundation comprised of the Florida Hurricane Catastrophe Fund, Citizens Property Insurance Corporation, and newly formed Florida home insurance companies looking to grow their customer base.

While things have improved with the Florida Cat fund and Citizens, the state of Florida still has a long way to go before this system has enough cash on hand to pay claims after a major Florida hurricane.

It’s really quite simple.

If these entities don’t have enough cash to cover their share of the claims they might have to raise cash in bond markets that are still unfriendly.

That means that some Florida homeowners could be waiting a long time to get their claim paid after the next major storm.

A major Florida hurricane in 2010 still could send shockwaves through out the state if there isn’t enough cash to pay claims.

That’s why many are pushing the Federal Government in Washington to consider a National Hurricane Catastrophe Fund.

But with the billions the Feds have spent on Wall Street, stimulus packages, and possibly healthcare in the near future, there will be very few people listening in Washington as Florida continues to make a case that the Federal Treasury should backstop Florida’s underfunded property insurance system.

To learn more about the Florida Property Insurance crisis, visit the Home Insurance Buyers Guide located at:

www.homeinsurancebuyers.org

 The buyers guide helps you find, screen, and contact Florida homeowners insurance companies still writing new business and can help you save thousands.

Discovering even one additional Florida home insurance company could make the difference in helping you to save thousands during these difficult financial times.

And avoiding even one thinly capitalized Florida homeowners insurance company that might not surive the next Florida hurricane is something you have to investigate further.

Learn more at:

www.homeinsurancebuyers.org

The St. Petersburg Times has run several stories on this – the most recent one on November 7, 2008 by Ivan Penn entitled “Consumers cry foul over Citizens’ shift to low rated firms“.

The concerns being highlighted in the article include among other things:

•  An assertion that the take out letters look like junk mail – not an offer to move a Florida homeowners policy out of Citizens Insurance to a private Florida homeowners insurance company.
• A time confusing process that must be followed if you don’t want your Florida homeowners insurance policy to be taken out of Citizens Insurance.
• The poor financial ratings that some of these take out companies have received from some of the organizations that rate Florida home insurance companies.

By far, most of the uproar seems to be the concern that these take out Florida home insurance companies are not financially stable.

If there is one message any Florida homeowners insurance consumer should take from this article is that you have to do your research on any Florida homeowners insurance company you are considering.

Before any consumer complains about the financial stability of a Florida take out company, it would be very wise to get the truth about Citizens Insurance.  With almost $500 billion in claims and approximately $15 billion in cash on hand to pay claims (much of it borrowed) Citizens Insurance Florida is not the poster child for financial stability.  Not to mention that if it has to tap the bond market to borrow additonal funds, the sub prime financial meltdown has created a situation where Citizens Insurance might not be able to borrow enough to pay all of its hurricane claims after a major storm.  And when losses reach a point where reinsurance has to kick in, guess where that money is going to come from?  The Florida Hurricane Catastrophe Fund – another State of Florida run entity also short on cash and heavily dependent on a shaky bond market to raise additional cash.

Now that we’ve cleared the air on Citizens Insurance, let’s talk about the Citizen Take Out Companies that are offering to take the Florida homeowners insurance policies out of Citizens Insurance.  According to the Citizens website, the 14 take out insurance companies mentioned in the St. Petersburg Times are:

American Keystone Insurance Company

American Integrity Insurance Company

Argus Fire & Casualty Insurance Company

Avatar Property & Casualty Insurance Company

Edison Insurance Company

Florida Peninsula Insurance Company

Homeowners Choice Insurance Company

Homewise Preferred Insurance Company

Landmark One Insurance Company

Magnolia Insurance Company

Northern Capital Insurance Company

Southern Oak Insurance Company

Sunshine State Insurance Company

United Property & Casualty Insurance Company

First let’s talk about the what a take out Florida home insurance company is and why taking Florida home insurance policies out of Citizens Insurance is supposed to accomplish:

• It moves homeowners insurance risk away from Citizens Insurance and puts it on private Florida home insurance companies.  The hope is that these policyholders end up with solvent Florida home insurance companies that will do a good job servicing a much smaller policyholder base than Citizens Insurance.
• By moving the risk to the private sector, the goal is to avoid a situation where Citizens Insurance gets buried by claims that it can’t pay and has to impose special assessments accross many different types of Florida insurance policies.
• Take out companies get an instant base of Florida home insurance policyholders – without the usual marketing costs.  This helps new Florida homeowners insurance companies build up their cash reserves.

Some of the downside of Florida take out home insurance companies include:

• Sometimes the new start-up companies can’t build up their cash reserves and go belly-up after a major event like a Florida hurricane.
• Florida take out insurance companies might have inexperienced staff and you end up being part of their claims handling training – right after a major hurricane.
• Some of these new Florida home insurance companies only accept Citizens Insurance policies and never write any new Florida home insurance business.  Citizens Insurance risk is reduced, but some of these companies do nothing to help consumer choice.
• Finally, there is no doubt that these take out companies cherry pick the risks being taken out of Citizens Insurance.  According to Citizens Insurance own website, these 14 companies are taking out 96% of their policies from the Citizens Insurance personal lines account, and only 4% from the Citizens high risk account.  In general, most of the policies being taken out of Citizens Insurance are newer homes, farther away from the coast, with newer roofs, and better home construction.  That leaves Citizens Insurance with the most risky, hurricane prone, right on the beach older type homes.

Finally let’s talk about the 14 Citizen Take Out companies as a whole.  They are a great example of how smaller, regional comapanies now dominate the Florida home insurance market. 

These 14 companies have an average surplus of $20 million.  Surplus is the amount of money a Florida home insurance company has to pay claims after satisfying all of its liabilities.  By comparision, State Farm Florida Insurance Company recently reported a surplus of $822 million.  That means State Farm Florida has 41 times the average surplus of these 14 companies!  American Strategic Insurance Company which started in the 1990′s and has developed nicely into a leading player in the Florida home insurance market recently reported a surplus of  $140 million.  While each of the 14 takeout companies vary in size, some of these Florida home insurance companies are just getting started.  This is the new reality in the Florida homeowners insurance market!

So where does that leave you if you want to get out of Citizens Insurance or you are trying to figure out if you should accept your Florida home insurance policy take out offer?

First, you should check the financial ratings of your Florida takeout insurance company with one of the major financial rating services.

Second, ask your Florida home insurance agent about the customer service of the Florida take out company and how many years they’ve been in business.

Third, ask your Florida insurance agent about the geographic distribution of the Florida home insurance policies being written by the take out company.  Have they spread their risk out accross Florida and other states or are they writing Florida home insurance policies mostly on Miami Beach or some other area that is ground zero for Florida hurricanes?

Finally, consider another possibility.  Find out if there are other Florida home insurance companies that want to cover your home.  You might be able to get out of Citizens Insurance and avoid a thinly capitalized Florida home insurance company.

In today’s market, you have to be proactive to find affordable Florida homeowners insurance with a good company.

You’ll be glad you did!

At a time when Florida homeowners insurance premiums are supposed to be flat or going down, my latest Florida home insurance policy bill for next year has a 21% increase! Why? Special assessments and reduced mitigation discounts from my Florida home insurance company. Special assessments are a significant cost Florida homeowners will be paying for years to come – even without more Florida hurricanes!

In this issue, we are pleased to welcome Mr. Tom Zucco as our featured guest columnist. Tom covered Florida home insurance for the St. Petersburg Times for the past 5 years as part of his 28 year career there. Tom recently decided to accept an early retirement offer. We are excited to share Tom’s perspective on the Florida home insurance market with you.

Michael J. Letcher—President, Home Insurance Buyers Guide, LLC

Featured Guest Columnist – Tom Zucco News Media Reporter – Florida Home Insurance Crisis

With 2 ½ months left to go in the Florida hurricane season, things have been anything but quiet. Hurricane Ike initially took aim at Florida but went on to devastate Texas where some experts are estimating up to $11 billion in damage claims. At that level, Hurricane Ike could be the 3rd most costly hurricane in US history – trailing only Hurricane Katrina and Hurricane Andrew. After Ike, Hurricane Gustav, and Tropical Storm Fay it’s no wonder many Floridians are breathing a sigh of relief so far this hurricane season. While our luck has largely held since the 2004/2005 hurricane seasons, we still face a new and uncertain landscape when it comes to Florida homeowners insurance.

Florida homeowners insurance premiums are still the highest in the nation averaging over $2,000 per year. I’m sure you’ve read plenty in the news about the decrease in Florida’s population, declining public school enrollment, and housing starts being way down. It’s no wonder Floridians rank the cost of their homeowners insurance as their # 2 concern, second only to property taxes. Many of us still face monthly payments for taxes and insurance which exceed the monthly cost of the principal and interest on our mortgages.How do we stand now, at the midpoint of the Florida hurricane season? Two good barometers (excuse the pun) are the CAT Fund and state-backed Citizens Property Insurance Corporation.The Florida Hurricane Catastrophe Fund (Cat Fund) provides back-up, or reinsurance, to Florida home insurance companies after hurricane losses reach a certain level. The Cat Fund has stated that it has enough cash to absorb a series of hurricanes of about the same magnitude as the 2004/2005 Florida hurricane season without having to borrow cash in an uncertain bond market. So it’s kind of a mixed bag. While the general health of the Cat Fund is good, it has experienced investment losses tied to sub-prime mortgages with the Florida State Board of Administration.Citizens Property Insurance Corporation covers most of the riskiest homes prone to wind damage. Citizens Insurance has also stated that it too has enough cash on hand to cover losses of about the same magnitude as the Florida hurricanes of 2004/2005. Citizens also experienced significant losses on investments with the Florida State Board of Administration. But thanks to quick action by recently retired chairman Bruce Douglass, it was able to avoid the temptation to put surplus cash in more risky investments on Wall Street.While investment losses at the SBA sustained by both the Cat Fund and Citizens Property Insurance have hurt, the past few years of calm have allowed both organizations to build cash reserves and improve their ability to respond to Florida hurricane claims. That’s the whole key to the Florida home insurance market. We have to dodge some bullets for a few years. And if we don’t, we have to hope the federal government will step in with Hurricane Katrina-like money. As executives at the Cat Fund and Citizens keep one eye on Wall Street and the other on the National Hurricane Center, consumers still face a limited, uncertain choice when it comes to finding private homeowners insurance in Florida.  The large companies such as State Farm Florida, Allstate Floridian, and Nationwide Insurance Company of Florida continue to seek higher rates and reduce their exposure to hurricane risk. State Farm Florida was recently turned down for a 47% rate increase. This has led to new concerns that their next step might be to cancel as many as 200,000 additional Florida home insurance policies. Many other well known Florida home insurance companies have long since left the state, creating a brand new landscape of many smaller insurance companies in a fragmented market.These newer, smaller, more nimble Florida insurance companies have the potential to make a lot of money from the current market conditions and relatively calm hurricane seasons since 2005. But many of us still have a healthy skepticism about those new companies. Some of this has to do with the lingering image of the Poe Financial Group three insurance companies owned by former Tampa mayor Bill Poe that couldn’t pay their claims after the 2004-05 storms, leaving Florida homeowners with over $800 million dollars in losses to pay for.Among the new Florida property insurers entering the market each year, only a very limited number will cover homes near the coast where a majority of Floridians live. Many will also not write homes exceeding a certain age. When they do write homes near the coast or older homes, they will only do so on a very limited basis.

• Where are they located and how long have they been licensed?
• Who owns and manages the company?
• Where did they get their initial capital, and how much surplus do they have?
• What are their ratings from the major financial rating agencies?
• Are they managing their policy base directly or has this been outsourced?
• Do they intend to stay in the Florida home insurance market for the long term?

The first line of defense for you as a consumer is the Florida Office of Insurance Regulation (OIR). OIR requires all licensed homeowners insurance companies to meet minimum capital investment standards and cash surplus to pay your claims. As consumers, we are heavily dependent on OIR to hold each of these insurance company’s feet to the fire. However, even the workload of OIR has increased in this new world where there are many smaller companies to regulate compared to the days of just a few large companies. Don’t forget that the Poe Financial Group was a group of regulated companies that was supposed to have enough money to pay its claims and those companies still failed.

So don’t rely only on OIR to do the due diligence on your own home insurance company. You have to be a smart shopper.

The one thing I’d like to leave you with is this: Don’t be afraid to ask questions.

Like the medical and legal fields, Florida insurance has its own language. Many times, people feel awkward trying to understand insured losses, covered perils and that’s the simple stuff. It’s your Florida home insurance agents’ job to answer ALL your questions. You’re paying that person a portion of your premium to do that. If you don’t get answers, find another agent or another company. There are plenty out there willing to earn your business.

The days of the friendly neighborhood insurance agent who coached the Little League team are gone.

With apologies to Chris Matthews … it’s time to play hardball.

Coverage of The Buyers Guide in the Media:

June 20, 2008:  South Florida Sun Sentinel Are you still struggling to pay for Insurance?

May 21, 2008: Rights Radio.com with Dr. Joyce Starr on BBS Live Talk Radio

May 10, 2008:  Sale Pending Hosted by Kelley Ann Ayers - 1530 AM WENG Talk Radio  

Florida Availability Update:

Availability Trends:

Most newly licensed Florida home insurance companies are choosing to take policies out of Citizens Property Insurance as their initial book of business.

While the availability of homeowners insurance in South Florida has improved, homeowners still face a market with limited capacity and underwriting restrictions on the age of the home and it’s distance from the coast.

Home Insurance Buyers Guide, LLC Celebrates its 1st Birthday!

In its first year of existence Home Insurance Buyers Guide, LLC has achieved the following milestones:

Built a member/subscriber base in all 67 Florida Counties.

Achieved news coverage in all major Florida media outlets.

Our top Florida Counties include Brevard, Pinellas, Palm Beach, Hillsborough, Broward, Dade, Charlotte and Sarasota.

Policy Cancellations:

Breakdown of Florida homeowner insurance companies you’ve reported that have cancelled your policies during the period from 9/28/07 through 9/18/08 by percentage:

State Farm Florida 45.3

Nationwide 18.6

Allstate Floridian 9.3

First Floridian Auto and Home 5.8

Metropolitan Property 4.7

United Services Automobile 3.5

USAA 3.5

Other Companies (See Below*) 9.3

* AAA, American Reliable, Armed Forces, Atlantic Mutual, Balboa, Farm Bureau, Hanover, Hartford, Horace Mann, Liberty Mutual Fire, Meritplan, Metlife, Service, St. Johns, State Auto, Teachers, Tower Hill Prime, Travelers Indemnity, United Property, and Universal of North America

Some of our favorite places to follow the Florida home insurance crisis:

Palm Beach Post:

Randy Diamond   Gotcha Covered Blog

Orlando Sentinel:

Anika Myers Palm Dropped Home Insurance Map

The article highlights the tremendous risk and financial consequences associated with homeowners insurance in Florida that are now squarely on the backs of all Floridians.

And quite frankly the article points out some shocking realities with Florida property and casualty insurance that very few people are paying close attention to:

• Citizens Insurance Florida executives told the Florida legislature in 2008 that the rates charged by Citizens Property Insurance Corporation are far below what is considered to be mathematically adequate.
• Takeout companies that have been approved to take Florida home insurance policies out of Citizens Insurance Florida are very thinly capitalized.  Those companies do not have the management experience to manage through the aftermath of a Florida hurriance.  To make matters worse, those companies are required to keep their rates at or below the rates of Citizens Property Insurance Corporation.
• Finally, few in public realize the magnitude of the chaos currently affecting the world financial markets.  Not long ago, the State of Florida had difficulty closing a CAT Fund bond deal for $625 million – in plain English that means that there were not enough investors willing to lend the money to Florida’s Hurricane Catastrophe Fund.  If the State of Florida had trouble selling out a bond issue for $625 million, what do you think is going to happen if they have to raise more?  Don’t forget – the Florida Hurricane Catastrophe Fund is on the hook for $29 Billion Dollars at the present time!

So where does all this leave you – the Florida homeowner and Florida businessman?

First if you are in Citizens Insurance you should see if you can get out by finding a private Florida homeowners insurance alternative to Citizens Insurance Florida.

The Home Insurance Buyers Guide can help you find, screen, and contact Florida homeowners insurance companies still writing new business in your area.

Use the Florida Home Insurance Buyers Guide to decide if you want to allow your Florida home insurance policy with Citizens Insurance Florida to be taken out by a thinly capitalized Florida home insurance company.

Finally, get involved with the Florida Homeowners Insurance Crisis and let your legislators know how you feel about the shaky financial condition of the Florida Homeowners Insurance Market.