Citizens Uncapping Rates

After 2004 and 2005 back to back hurricane years insurance rates in Florida were rising. To help out the current governor at the time along with others agreed to force the price of Citizens insurance down and prevent them from charging the calculated rate.

While this provided temporary relief in Florida it has killed competition in many counties of Florida. In many areas of Florida it is Citizens or nothing due to the artificially low rates. If current legislation is passed it will allow Citizens to increase rates and become the provider of last resort as intended. The result of this move will be hundreds of thousands of homeowners shopping for insurance. Prices will increase and insurance but as competition returns to Florida prices should begin to drop again.

No one wants insurance prices to increase but if Citizens is not depopulated and we are hit with a large hurricane the entire state could end up owing to cover for Citizens. That is the worst thing that could happen to Florida financially.

The reason I mention this is that the legislation will be mentioned as a bad thing for Floridians. We all need to make sure we help educate homeowners, agents, realtors and everyone else we deal with how important it is that this happens.

Thank you governor Scott…and so it begins…as predicted…

bad for my community, but good for my business

The cost of insurance is doing to drive people to rent or move to cheaper areas. Most first time home buyers will no longer to be able to afford taxes and insurance on top of their principal payment. Expect to see more short sales and foreclosures as these costs keep spiraling upwards. The average cost of insurance in my area is about $2300.00, plus $500.00 for flood insurance. That alone adds $250.00 per month onto the bill, plus about $180.00 a month for taxes. That is $430.00 before you even start. How much home does that leave the average homeowner to buy. Now comes the creative financing and the cycle starts all over again.

Next on the horizon will be thousands of people losing their homes because they can’t afford insurance. We hear it every day. Rates increasing by over $100/mo. With as many retirees as we have in our state, they can’t afford it.

The only solution to the rising prices is competition. Think about it, why would a company want to invest money in gaining customers only to have Citizens come in and steal your business because they have rates that don’t make sense.

If companies can return to south Florida then there is chance that they will compete to offer the best service at the best price.

I see people who can no longer afford their homes due to insurance hikes.

Insurance companies are the scum of the earth.

Get the van ready

The companies that left Florida did so to avoid any further losses, yet, they are still allowed to write atm, er auto insurance policies.

The biggest question is what happened to all that money when there were no storms that resulted in significant damage?
Andrew was in 1992. How many storms have we had here since?

That is a pretty harsh statement.

Profits from insurance are made from the difference between the premium they get and the amount they pay for re-insurance and claims. The price of insurance has gone up because the price of re-insurance has gone up. Add to that the wind mitigation credits forced upon the insurance companies and the remainder are razor thin profits.

If you want to get upset at someone you should get upset at the people making the cost of insurance go up. Reinsurance, lawsuits, fraudulent wind mitigation credits, and homes on the coast. Getting angry with insurance companies is like getting angry at the gas stations for the price of gas.

I loved when the A-Team would get the van ready. Just add armor.

21 named storms have hit the Florida coastlines since 1993, a couple of category 3, 4s and at least one 5 (Ivan). We all have a tendency to forget those that did not affect us personally or went ashore someplace other than our areas. That does not include some serious T.S. that did damage or any that hit elsewhere outside FL. The insurance companies pay for ALL of them, not just those that hit FL. It also does not include those areas adjacent to major storms like Katrina that affected the panhandle. Anyone East of a major storm is greatly affected. Whole towns in MS disappeared but no one heard about them because of the News media focusing on New Orleans for months. The storm surge and winds were higher to the East and more damage and devistation along the MS gulf coast than in N.O.

http://www.photosfromkatrina.com/default.htm

I am well aware of the other storms, however, the question remains, what happened to the money?

Well, Eric, your first premise is flawed; “no storms with significant damage” when in fact, there have been many. Just one storm Ivan costs were in the billions. Insurance companies don’t have different pots of money for each and every catastrophy or State. That money gets spread all over when disaster strikes; earthquakes, forest fires, major floods, etc. The same insurance companies that pays for the earthquakes and mudslides in CA pays for the hurricanes in FL and any other disaster that strikes our country. ALL of those costs gets figured in when the “restoration” phase goes into affect. I used to be a Public Adjuster in FL. I did not work for the insurance company, I worked for the homeowner who was getting shafted by the insurance company. Basically their hired gun. They may have built or bought a house in 1988 that costs them $80K but because of Government mandates and new codes, EPA requirements, FEMA requirements, etc. put into place by the local and national agencies, they have to spend $300K to be “made whole” again.

I know this because I dealt with cases just like that. Some could not even build on their own property again so they not only lost their home, they lost the ability to be restored to their original position. That happened thousands x thousands of times up and down the gulf coast. Do the math. I talked to another adjuster who was called to Tallahassee after Ivan since he was both an adjustor and a well known insurance pioneer in the State. Many insurance companies lost their ASSES due to having heavy liabilities on their books in FL. You have to consider commercial properties, boats, residencial, thousands and thousands of automobiles and other vehicles. It is not as simple as collect the money and pay out the claims. Anyone that showed up with a roofing license from any State could go to work immediately. Many permits were never pulled or paid for which created a problem for people now trying to get Wind Mit. It is a royal cluster ****.

Don’t even get me started on the amount of insurance fraud that was and is perpetrated during and after these storms, I got to see it first hand as both a home inspector and an adjustor. I have a lot of friends who do the FEMA inspector thing too all over the country and they have many stories of the fraud that goes on. I know also first hand there were thousands of homes that had no roof damage but the homeowners were not home so the “blue tarp” army went down their streets tarping every home because they got paid by the house. When the homeowners returned, they had to turn in a claim for a new roof which had no problems until the tarp army rolled down their street. I talked with many roofer from out of State who were here doing the roof repairs and I heard that story over and over. Once they peeled back the tarp they found perfectly good shingles with no damage other than nail holes from the tarp bandits.

Then there were those who needed a new roof before the storm so they tarped the roof and the adjustors from the Insurance company did not question it or tear back any tarps. Just Paid it and moved on to the next house. So some of this lies at the feet of dishonest ciitzens on all sides of the situation. I have heard numerous people bragging about how they got a new roof, new generator, etc, etc. making false claims for all kinds of things. Insurance passes those costs on to their customers, just like a home inspector who has to cover his or her costs of doing business.

Costs were so much due largely, in my opinion to fraud. As you pointed out, the “blue tarp” armies. Then again, I know of some who never got a dime from insurance companies.
I would still bet that the insurance companies made more than they lost and are “bulking up” on people now. We will see what happens when a major storm hits.

I know some insurance companies that refused to pay off their customers. Had a case of just that. This happened too; insurance company makes the claim that all or most of the damage was caused by “flood”, discounting anything that was done by wind long before the storm surge or flooding occurred. This was discovered all along the gulf coast after most of the major storms. The homeowner was left to be at the mercy of their insurance carrier and their adjustor who works for…the insurance company! The insurance industry “changed” the definition of flooding some years back to be some like …“any accumlation of surface water…” well, that just about covers everything. They ask the homeowner if there was any standing water in the yard after the hurricane or T.S.
Well, yeah, there was…viola…flooding! Oh! I see here you don’t have flood insurance in your package…man, we are so sorry! I had one client whose insurance agent told them when they bought the house they were NOT in a flood zone…their back yard ended at the water’s edge…WTF? They lost everything and got nothing from their claim. And it is NOT the little fly by night companies doing this…it is the top ten big operations, the ones we all recognize as the big insurance companies. This was documented by FAPIA the Florida association for insurance adjustors and put in an article. You don’t have to look to far in FL to find fraud. Like I said, it is on both sides. The honest homeowner is left holding that “soiled” end of the stick in way of high premiums and piss poor coverage. Getting to be that FL is not the “Sunshine” State unless you are talking about it being blown up your backside.

I wish my wife would let me tell them to pound sand.

But, I am glad because she is probably right and the next day something would happen.

I heard the idiot spokeswomen from citizens say they were raising the rates up to 90% for new clients.

She said it was encourage them to shop around.

Everyone involved with citizens should be locked up.
How come no one sees a conflict of interest with the O.I.R. and Citizens???
People speak as if they are one and the same. The O.I.R does whatever Citizens wishes. The State should not be involved with selling insurance if they are supposed to be regulating it. WTF?

As inspectors we should try to remain impartial including public forum posts. Anything said here reflects the views of all Nachi inspectors, not just you. Even if you are the only one who feels a certain way remember many people read these forums.

The OIR is very seperate of Citizens. They do consult with Citizens as any regulating body should. Citizens is the largest insurance carrier in Florida.