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Florida Homeowner's Insurance: Think Twice Before Moving Here
- Thread starter SpongeScott
- Start date
Woody13
New Member
State Farm Wants More Money!
Published - July, 6, 2006
State Farm withdraws 79 percent hike
Paige St. John
News Journal capital bureau
TALLAHASSEE -- Even as Nationwide filed Thursday for a statewide average 71 percent increase in home insurance rates, State Farm warned a similarly large hike it had sought won't be enough.
State Farm Florida has withdrawn its pending filing for a 79 percent hike, telling regulators its costs have risen significantly since the original request was made in May.
There is no mention of when State Farm might resubmit its request and company representatives Thursday declined comment.
Nationwide's 71 percent rate increase request gives coastal residents a comparative break, saving the biggest hikes for Floridians who once enjoyed the discount of living north or far from the water.
The company seeks hikes ranging from 120 percent in Orange County to 180 percent in Jefferson County.
Local increases range from 14 to 54 percent in Brevard County, 20 to 47 percent in Lee and Collier counties, and 42 to 74 percent in Escambia and Santa Rosa counties.
Nationwide, which last year stopped writing new business in Florida, has 261,300 policies, including more than 8,000 in Brevard and 3,700 in Indian River counties; 7,400 in Lee, 5,000 in Collier and 2,800 in Charlotte counties; 5,700 in Escambia and 2,300 in Santa Rosa counties. The proposed rates would go into effect Nov. 10.
Both State Farm and Nationwide attempt to protect themselves from hurricane losses in Florida by buying their own catastrophe coverage. It is those reinsurance costs that are cited to justify the bulk of the rate hikes.
"While such coverage is necessary, we unfortunately do not have regulatory authority over what these re-insurers charge," said Florida Insurance Commissioner Kevin McCarty.
However, both State Farm and Nationwide seek to buy most of their reinsurance from their parent companies, at rates triple what they paid in 2004. If the year is without major storms, the national companies keep that as profit.
Nationwide of Florida seeks to pay $137 million to its parent company.
State Farm proposed to pay $447 million to its national parent, part of a $661 million reinsurance package it now says won't be enough.
"Because the net costs of reinsurance have changed (increased significantly), we are withdrawing this filing," State Farm actuary Robert Kelley wrote in a June 29 letter to regulators.
Both companies also seek higher profits in Florida, to offset what they say is the risk of large losses.
Embedded in Nationwide's and State Farm's filings were 15 percent underwriting profits -- larger than the state's recommended margin of 3.7 percent.
Strip out such "excessive" profit, and State Farm would have been left with only a 16 percent hike, according to calculations by Stephen Alexander, an actuary working for Florida's Insurance Consumer Advocate Steve Burgess.
However, McCarty denied a request for a hearing to bring up Alexander's findings. Burgess is now likely to get that public testimony if State Farm re-files its rate request.
I am extremely concerned about the impact this requested rate hike would be on Floridians pocketbooks, particularly those with low incomes or on fixed incomes," McCarty said in a written statement Thursday commenting on Nationwide's filing. However, he noted he must also ensure companies collect enough money to pay storm losses in bad years.
McCarty's office has 90 days to rule on rate filings, and by law must hold a public hearing for requests for increases over 15 percent. :wave:
Published - July, 6, 2006
State Farm withdraws 79 percent hike
Paige St. John
News Journal capital bureau
TALLAHASSEE -- Even as Nationwide filed Thursday for a statewide average 71 percent increase in home insurance rates, State Farm warned a similarly large hike it had sought won't be enough.
State Farm Florida has withdrawn its pending filing for a 79 percent hike, telling regulators its costs have risen significantly since the original request was made in May.
There is no mention of when State Farm might resubmit its request and company representatives Thursday declined comment.
Nationwide's 71 percent rate increase request gives coastal residents a comparative break, saving the biggest hikes for Floridians who once enjoyed the discount of living north or far from the water.
The company seeks hikes ranging from 120 percent in Orange County to 180 percent in Jefferson County.
Local increases range from 14 to 54 percent in Brevard County, 20 to 47 percent in Lee and Collier counties, and 42 to 74 percent in Escambia and Santa Rosa counties.
Nationwide, which last year stopped writing new business in Florida, has 261,300 policies, including more than 8,000 in Brevard and 3,700 in Indian River counties; 7,400 in Lee, 5,000 in Collier and 2,800 in Charlotte counties; 5,700 in Escambia and 2,300 in Santa Rosa counties. The proposed rates would go into effect Nov. 10.
Both State Farm and Nationwide attempt to protect themselves from hurricane losses in Florida by buying their own catastrophe coverage. It is those reinsurance costs that are cited to justify the bulk of the rate hikes.
"While such coverage is necessary, we unfortunately do not have regulatory authority over what these re-insurers charge," said Florida Insurance Commissioner Kevin McCarty.
However, both State Farm and Nationwide seek to buy most of their reinsurance from their parent companies, at rates triple what they paid in 2004. If the year is without major storms, the national companies keep that as profit.
Nationwide of Florida seeks to pay $137 million to its parent company.
State Farm proposed to pay $447 million to its national parent, part of a $661 million reinsurance package it now says won't be enough.
"Because the net costs of reinsurance have changed (increased significantly), we are withdrawing this filing," State Farm actuary Robert Kelley wrote in a June 29 letter to regulators.
Both companies also seek higher profits in Florida, to offset what they say is the risk of large losses.
Embedded in Nationwide's and State Farm's filings were 15 percent underwriting profits -- larger than the state's recommended margin of 3.7 percent.
Strip out such "excessive" profit, and State Farm would have been left with only a 16 percent hike, according to calculations by Stephen Alexander, an actuary working for Florida's Insurance Consumer Advocate Steve Burgess.
However, McCarty denied a request for a hearing to bring up Alexander's findings. Burgess is now likely to get that public testimony if State Farm re-files its rate request.
I am extremely concerned about the impact this requested rate hike would be on Floridians pocketbooks, particularly those with low incomes or on fixed incomes," McCarty said in a written statement Thursday commenting on Nationwide's filing. However, he noted he must also ensure companies collect enough money to pay storm losses in bad years.
McCarty's office has 90 days to rule on rate filings, and by law must hold a public hearing for requests for increases over 15 percent. :wave:
Update!
The Florida state legislature met this past week and there are new homeowner's insurance laws in effect. Basically, all rate increases have been repealed and savings on insurance will go into effect beginning June 1. Savings will range from 7 to 22 %.
http://www.sptimes.com/2007/01/23/State/Legislators_play_odds.shtml
The Florida state legislature met this past week and there are new homeowner's insurance laws in effect. Basically, all rate increases have been repealed and savings on insurance will go into effect beginning June 1. Savings will range from 7 to 22 %.
http://www.sptimes.com/2007/01/23/State/Legislators_play_odds.shtml
I'm sorry, Florida is full now.
You can still move to Miami because that is no longer part of florida.
:lol:
palmage
Member
I believe that the insurance problem has been exacerbated by developers building in areas that should not be developed.
So ALL of the residents of Florida are subsidizing homes in areas where NO homes should be built. Of course, most of Florida is not really suitable for homes. I'm not even sure that my 1913 home should really be here.
I live in one of those homes on the barrier islands of St Petersburg, it was built is 1953 and to this date has never flooded once.
Mom is so right about developement, but the problem is that's where people want to live.
If you build it, they will come.
So far my rates haven't sky rocketed.
Are you with Citizens or still fortunate enough to have a private insurer?
beachclubbasics
New Member
I worked in health insurance inthe 90s. The first day on the job our boss told us "Remember, we are not a charity". Even thoughthey take your money, they feel that most payouts are charity. Nice huh?
No they dont.
palmage
Member
I'm with Citizens for wind, but private for everything else.
St Pete just doesn't get hit.
On a somewhat related note for Floridians, the state legislature has cut property taxes. It's not much, but it's something.
http://www.sptimes.com/2007/06/15/State/On_Day_3__a_tax_deal.shtml
For my family, this works out to about a $227 savings on our taxes. For others, it won't be that big. My parents, who have lived in their Florida home since 1991, will save $33.
A super-homestead exemption goes before the voters in January, which could slash taxes over 70% for some. It will require a 60% passage since it's a constitutional amendment.
http://www.sptimes.com/2007/06/15/State/On_Day_3__a_tax_deal.shtml
For my family, this works out to about a $227 savings on our taxes. For others, it won't be that big. My parents, who have lived in their Florida home since 1991, will save $33.
A super-homestead exemption goes before the voters in January, which could slash taxes over 70% for some. It will require a 60% passage since it's a constitutional amendment.
Skylinecar1982
New Member
First Statement I agree with but what about the people who don't do that and still get treated that way because they fit some profile somewhere for their company. I only say this because I fit a profile for a group but I in no way other dempgraphic, I don't participate in any scams but still get treated like I do.
And for the second statement that is so true and makes me so sick. People also don't realize by going to the doctor all the time they are essentially making themselfs weaker. Becoming more dependent on the quick fixes and a doctors opinion.
There is, however, a little fly in the ointment that most Floridians don't know about...but they will come tax time.
IF you decide to take the new increased homestead exemption, you can no longer be a part of the Save Our Homes initiative, which puts a cap (I think it's 4%) on the increase in your home's taxable value and your assesed taxes each year. So yes, you might get up to a $195,000 homestead exemption (the maximum, regardless of your home's value) but your home's value could double or triple in less than a decade.
So, this is a good tax break for those who have not lived here for very long, and those who don't plan on staying here forever. For others, such as myself, it is not as attractive as it seems, even when just looking at it selfishly. Right now, with the cap and current homestead exemption, my home is assesed at about 1/3 of market value. This would NOT be the case if I opt out of the current program; my taxes would actually be higher. AND, it's an all or nothing deal (at least the way it's written now) Once you make your choice, it's permanent.
I'm not even going to go into what this may do to a county's infrastructure, especially those counties with increased new development, with an increase in younger families who will be needing new schools.
Of course, the people who will be hit the hardest will be those with second homes in Florida, who can not take advantage of ANY of the tax breaks unless they can prove that it's their primary residence. I've seen what can happen, as my property assesment on a weekend cottage went up almost $100,000 last year; the property is valued (for tax purposes) at 4X our initial purchase price in 1986. So my taxes increased by over $1,000 in one year. The same increase in value is true for our primary home, but we have the cap to protect us. I'm afraid that the people who might actually end up paying more (older residents who have owned their home for over 20+ years and plan on dying in it) if they go with the new plan are the ones who won't get all the information they need, or won't be able to assimilate it without assistance.
Good and fair points. If the amendment passes in January, being a long-time homeowner in FL, you would still have the option of keeping Save Our Homes. For others, like me, the new system would work better. That's why I like the option they will allow people if the new exemption goes through. By the time we vote, it's gonna get ugly!
It's already starting. :ROFLOL: There is also an opt out clause that was added at the last minute; any city with 9 council members or more can opt out if a consensus is reached. Jacksonville is one of those cities.
If JAX doesn't opt out (which I find highly unlikely) there will still be lots of complaints (in the future) by people who didn't read the fine print, as mentioned above. :lol:
Even with renters insurance after damage to house( moved to apartment 2004) we were dropped twice from companies leaving the state. I think we paid about $400 for the renters policy-$35000 content and $5000 for living somewhere if damage too bad to live in the apartment. It went up in 2006 and would not cover as much with a higher deductible-going to the percentage like homeowners has. It also stipulated that we would have to buy first out of our own money and submit the bills to be repaid instead of them writing a check for the damage and letting us then go buy furniture etc.
We own a new house built after 2006 so up to hurricane standards for this area of the state and could not get insurance from any company you ever heard of. We are with an unknown company paying a couple thousand for insurance and don't have a lot of confidence that they will be here after a storm to help us rebuild if we have to. Almost everyone I know has been dropped by at least 2 companies since 2004 and almost everyone I know pays 100% more for their insurance than they did in 2004 even for renters. Some of the people I work with were priced out of insurance and are going without now,
One other thing you have to realize about living here. During hurricane season....don't stock up frozen food in the freezer---- ya lose it when electricity is off for days.....have about $500 set aside to get you through each hurricane for needed supplies cause banks might not be open and maybe cards won't work at stores if they are able to reopen etc. and don't think that FEMA and the Red Cross etc. will be there to feed you and help you right after a storm.
After 3 hurricanes here in 2004 I never saw a Red Cross food tent or FEMA help anyone at all. Fire department and banks got ice and water to the area and churches did set up food in some areas but nothing in my town. Some stores even gave out free water and ice. You had to get miles from your house to get anything though so if flooded you needed supplies at your home so you do need the hurricane tubs full of canned goods etc. If you have well water---- there will be no water available if the electricity is off because pumps run on electricity.
rlaeromech
Member
personally they should cut property taxes altogether or make it a one time fee like a sales tax. One of the great privelages in American Freedom is private property ownership and we gave it up with property tax. You can work all your life to pay-off your mortgage and say that you finally completely own your property. Go a year without paying the property tax and see what happens. You never truly own it! Not with a yearly property tax. Just my opinion.
PeeplMoovr
Active Member
Wow! I couldn't have said it better myself. My job requires me to make this point to people at times, and so many people just refuse to listen. Too bad. It isn't just about saving homes or keeping insurance down - once a hurricane hits it'll be about saving the lives of people who live in those homes.
I know this thread is a little old, but still interesting and valid for people living in Florida.
I owned a home in Central Florida for 9 years. Initially I had State insurance because no one was writing new policies in Florida when I was buying.
A couple of fallacies I noticed in this thread. Insurance is NOT optional, if you have a mortgage. And not many mortgages will "find insurance for you". What happens in a lot of cases is that if your insurance is cancelled for whatever reason and the mortgage company finds out they can and often do find you in breach of contract and foreclose the mortgage. It gets very complicated.
Come the ugly 2004 hurricanes when Charlie made that abrupt turn and came across Orlando instead.
It took about 1/3 of my roof off. I had been picked up by a private insurance carrier by that time. I called to file a claim the next day. While on the phone, the ceiling fell in on my head...LOL Would've made a GREAT commercial.
I had a $1000 hurricane deductible.
The adjuster came out very quickly. He went through the house and I wanted to show him a couple of things to check...his response "No thank you, what I don't see I can't write up."
My mouth hit the floor. I wasn't sure how to handle what he said.
He left and I was mailed a check for about $4000. My roof was gone including the eave structure with two rafters busted. Mold and mildew growing in the walls of my house, carpet and furnishings ruined (yes I had contents insurance as well) The roof on the porch destroyed and I had a check for $4000 to pay for it with. The lowest roof estimates I could get were around $8000-10000. Let alone paying for the piano, carpet, repairs to the ceiling, rafters and insulation as well as the A/C duct work that had been ruined, etc etc etc. I had paid my premiums through the mortgage company on time everytime.
Meanwhile, Disney had organized a relief fund for Cast Members who had suffered in the storm and subsequent storms. CMs could donate into the fund and Disney provided some seed funding and matching funding. If you needed assistance they had forms to be filled out. I filled out a form and within a week they issued me a tax free check for $1000 assistance funds.
I had two contractors send estimates to the company which they refused to acknowledge. They told me to use one of their contractors, asked which contractor they said they only had one. The contractors representative said they only handled business claims not personal claims. So much for that route.
Three months and two more hurricanes later, I was still arguing with them on the phone trying to get another adjuster out. I had put up some temporary plywood patchwork style and foam and plastic to try to keep the water out. Jeanne ripped all that back off and tidal waves came into the living room while I sat in the kitchen and made a cup of tea.
I finally sat with my file folder where I had kept track of all phone calls and all receipts and related paperwork. A friend at my church referred me to an attorney. I explained that I thought they were sending out another adjuster but at this point I did not trust them. He said let's see what happens if they send another adjuster and I'll have our adjuster meet with him and maybe we can come up with something.
A week later, another adjuster called and we made an appointment for him to come look. When my attorney called to arrange with his adjuster the Insurance company said you have an attorney now we won't cooperate at all and cancelled their adjuster.
I filed a law suit for breach of contract.
A year later, I was still chasing water in the house and trying to keep the roof patched. A friend from my church raised some money so I could finally pay a private contractor to put a roof up at least. The inside of the house was still hideous. I was embarrased to have to take so much charity but was left without recourse.
Eventually I was able to patch the house enough to sell it on the rising housing bubble and moved to Texas where I am going to school. Meanwhile the parent company of my insurance company bankrupted that particular insurance branch and Citizen's national had to pay out the settlement just last year.
So much for the "safety-net" that made me laugh when I read that. My safety net was the people at my church and my neighbors and WDW. The people that took my premiums were NOT the safety net. I was able to pay back the people who gave me the charity with some interest from the settlement.
Homeowner's Insurance is a scam! They got their bottom line all right.:hammer:
I owned a home in Central Florida for 9 years. Initially I had State insurance because no one was writing new policies in Florida when I was buying.
A couple of fallacies I noticed in this thread. Insurance is NOT optional, if you have a mortgage. And not many mortgages will "find insurance for you". What happens in a lot of cases is that if your insurance is cancelled for whatever reason and the mortgage company finds out they can and often do find you in breach of contract and foreclose the mortgage. It gets very complicated.
Come the ugly 2004 hurricanes when Charlie made that abrupt turn and came across Orlando instead.
It took about 1/3 of my roof off. I had been picked up by a private insurance carrier by that time. I called to file a claim the next day. While on the phone, the ceiling fell in on my head...LOL Would've made a GREAT commercial.
I had a $1000 hurricane deductible.
The adjuster came out very quickly. He went through the house and I wanted to show him a couple of things to check...his response "No thank you, what I don't see I can't write up."
My mouth hit the floor. I wasn't sure how to handle what he said.
He left and I was mailed a check for about $4000. My roof was gone including the eave structure with two rafters busted. Mold and mildew growing in the walls of my house, carpet and furnishings ruined (yes I had contents insurance as well) The roof on the porch destroyed and I had a check for $4000 to pay for it with. The lowest roof estimates I could get were around $8000-10000. Let alone paying for the piano, carpet, repairs to the ceiling, rafters and insulation as well as the A/C duct work that had been ruined, etc etc etc. I had paid my premiums through the mortgage company on time everytime.
Meanwhile, Disney had organized a relief fund for Cast Members who had suffered in the storm and subsequent storms. CMs could donate into the fund and Disney provided some seed funding and matching funding. If you needed assistance they had forms to be filled out. I filled out a form and within a week they issued me a tax free check for $1000 assistance funds.
I had two contractors send estimates to the company which they refused to acknowledge. They told me to use one of their contractors, asked which contractor they said they only had one. The contractors representative said they only handled business claims not personal claims. So much for that route.
Three months and two more hurricanes later, I was still arguing with them on the phone trying to get another adjuster out. I had put up some temporary plywood patchwork style and foam and plastic to try to keep the water out. Jeanne ripped all that back off and tidal waves came into the living room while I sat in the kitchen and made a cup of tea.
I finally sat with my file folder where I had kept track of all phone calls and all receipts and related paperwork. A friend at my church referred me to an attorney. I explained that I thought they were sending out another adjuster but at this point I did not trust them. He said let's see what happens if they send another adjuster and I'll have our adjuster meet with him and maybe we can come up with something.
A week later, another adjuster called and we made an appointment for him to come look. When my attorney called to arrange with his adjuster the Insurance company said you have an attorney now we won't cooperate at all and cancelled their adjuster.
I filed a law suit for breach of contract.
A year later, I was still chasing water in the house and trying to keep the roof patched. A friend from my church raised some money so I could finally pay a private contractor to put a roof up at least. The inside of the house was still hideous. I was embarrased to have to take so much charity but was left without recourse.
Eventually I was able to patch the house enough to sell it on the rising housing bubble and moved to Texas where I am going to school. Meanwhile the parent company of my insurance company bankrupted that particular insurance branch and Citizen's national had to pay out the settlement just last year.
So much for the "safety-net" that made me laugh when I read that. My safety net was the people at my church and my neighbors and WDW. The people that took my premiums were NOT the safety net. I was able to pay back the people who gave me the charity with some interest from the settlement.
Homeowner's Insurance is a scam! They got their bottom line all right.:hammer: