Living on the beach in Florida is a luxury and foolish. Beachfront property is ill suited for development in numerous ways but certainly wind and erosion are the 2 big issues.
The reality is that most would not move out of Florida. They\’d move inland which is much better suited for development and predictable risk. The windstorm risk does become much more manageable 2-3 miles inland.
The beachfront homes and development are what is driving this issue and the inland homeowners are used as a smokescreen to mask the real issue.
The measly amount of commission agts receive from Citizens is getting less and less worthwhile. Agents do it as a public service, to help those who are unable to obtain insurance elsewhere. Notarizing every Diligent form? Calculating RC every year? Please! We should just let them cancel! Let the people who want to reduce agts\’ commissions work directly for Citizens–they will then realize that commission expense is actually less than what they will have to pay, for an army of office drones at minimum wage!
There wasn\’t much of a problem in Florida until Hurricane Andrew hit. Then we had the JUA, but competition was making a comeback and insurance was affordable until \’04 and \’05 when Hurricanes Jeanne, Francis and then Wilma hit. \’06 was to be more of the same and therefore carriers kept raising rates, but there we no hurricanes.
Therefore, the real solution is simple: Have Max Mayfield and the rest of his doomslayers predict calm hurricane seasons for the next 10 years as opposed to saying they will be overly active. They don\’t know anyway, so why be so negative? This way the underwriters can look at the reports from the National Hurricane Center saying the Atlantic will be calm or normal, and they can lower the rates! Problem Solved!
The recent action by the State Senate is another indication that the State of Florida nor politicians should be in the insurance business. Why not lower Citizens Property rates, so when you cannot afford to pay claims again you just assess every commercial and residential property for your short fall. Businesses having to pay hundreds even thousands of dollars in surcharges to bail out yet another failed State Insurance plan. Oh yea, the article forgot to mention one thing, agents are partly to blame for Citizens being unprofitable, because they are paying all those commissions out?
There are an estimated 45,000 policies going into Citizens a month, agents receive less than 6.9% commissions (because half the fees and premium are not commissionable), the panel proposed two solutions pay the agent a flat $25 fee or a $100 flat fee. With all the underwriting requirements Citizens mandates, how can an agent afford to write a policy for $25 fee? What a genious proposal from bureaucrats. Citizens was an ill conceived under funded program that the State of Florida had no business being in!
you sound like you are on the front line dealing with this issue.
Surely you have run into the morons that have a 3,000 square foot house built on the waterfront and cant understand why their insurance for the same sized house in Chicago was only $2000 and it\’s $12,000 in Florida.
These same rocket scientists are also unable to grasp the fact that while a 100 year old home is not even remotely unusual in Chicago its unheard of in Florida. It\’s as if the loss frequency is the same for Chicago and Florida.
These same einsteins then elect some of the most liberal and amoral judges in the country who pretty much interpret the policy contract any way they want without regard to what actually was purchased. Add to the mix a bunch of lawyers milking the system for all it\’s worth.
Then take all of these geniuses and mental incompetents and have them vote in people who are going to \”solve the problem\” and its no wonder that this mess is as bad as it is.
The only solution is let the market charge whatever it wants. Make the buyer become educated and let the companies make the money necessary to take on the big, big risk associated with Florida. They will come but they will demand an excess profit since great risk demands great returns. Otherwise they will just offer their insurance product in lower risk areas that are much more predictable.
Once again the responses to this article are putting the emphasis on \”beachfront\” proeprty and not the problem as a whole. There are no properties in Florida that are safe from Hurricane damage. Just look at 2004\’s 4 storms that cris-crossed the central Florida area. More than 75% of the insured losses occured in \”inland\” areas and non-coastal counties like Orange, Seminole and Lake (Orlando area). This problem is Statewide, not just on the beach. Having ther State manage a catastrophy insurance product like the windpool is far more advantageous than having the State in the full blown insurance business. Let\’s take the catastrophy potential out of the picture and let the insurance industry do what it does best…insurance.
Harcourt you hit the nail on the head – Let the market charge whatever it wants. And that is the most misunderstood statement, because insurance companies will not charge a zillion dollars, they will charge whatever the actuarial sound price is for that particular risk. The government does not need to be in the insurance business, now people expect the government to resolve the insurance issue.
FL Retail Agent has it right. I live in Monroe County and in the 8 years I have lived here the only hurricane to hit and do substantial damage was Wilma. Yet for years Monroe county has paid the highest retes in Citizens. Monroe county has the highest building codes in the state and we still have the highest rates.
We now have a grassroots watchdog in Tallahasse as we speak, FIRM (Fair insurance rates in Monroe) who are talking to the legislature and Gov. Christ with real solutions.
I am not a wealthly, waterfront homeowner. My wind only premium is roughly 10% of my gross income. The rates in FL need to be adjusted because the state as a whole is a hurricane risk as FL Retail Agent pointed out.
My beachfront home had a leak in the bathroom \”hurricane\” window during Francis and Jeanne. Thank God, that\’s all the damage I had. My rental triplex over in Highlands County, which is in the middle of the state and eighty miles from the beach, lost a few shingles from Charley, a bunch more from Francis, and was decimated 2 weeks later from Jeanne. Why the difference? New building codes. Every building in the state has hurricane exposure. That\’s why Fla. Retail Agent\’s idea is so compelling.
The state has the ultimate risk, especially when private insurers go bankrupt. They can write the laws to strengthen the building codes and mitigate the damage from wind. They can borrow money cheap, and if necessary, have the power to tax.
The private insurers don\’t want the exposure to the catastophic risk. Who can blame them? Just as the Feds took over flood insurance, the state should take over the windstorm insurance.
And LL, you deserve to get paid for your work. I know I\’m very appreciative of my agents and their efforts on my behalf.
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azuw
Living on the beach in Florida is a luxury and foolish. Beachfront property is ill suited for development in numerous ways but certainly wind and erosion are the 2 big issues.
The reality is that most would not move out of Florida. They\’d move inland which is much better suited for development and predictable risk. The windstorm risk does become much more manageable 2-3 miles inland.
The beachfront homes and development are what is driving this issue and the inland homeowners are used as a smokescreen to mask the real issue.
The measly amount of commission agts receive from Citizens is getting less and less worthwhile. Agents do it as a public service, to help those who are unable to obtain insurance elsewhere. Notarizing every Diligent form? Calculating RC every year? Please! We should just let them cancel! Let the people who want to reduce agts\’ commissions work directly for Citizens–they will then realize that commission expense is actually less than what they will have to pay, for an army of office drones at minimum wage!
There wasn\’t much of a problem in Florida until Hurricane Andrew hit. Then we had the JUA, but competition was making a comeback and insurance was affordable until \’04 and \’05 when Hurricanes Jeanne, Francis and then Wilma hit. \’06 was to be more of the same and therefore carriers kept raising rates, but there we no hurricanes.
Therefore, the real solution is simple: Have Max Mayfield and the rest of his doomslayers predict calm hurricane seasons for the next 10 years as opposed to saying they will be overly active. They don\’t know anyway, so why be so negative? This way the underwriters can look at the reports from the National Hurricane Center saying the Atlantic will be calm or normal, and they can lower the rates! Problem Solved!
The recent action by the State Senate is another indication that the State of Florida nor politicians should be in the insurance business. Why not lower Citizens Property rates, so when you cannot afford to pay claims again you just assess every commercial and residential property for your short fall. Businesses having to pay hundreds even thousands of dollars in surcharges to bail out yet another failed State Insurance plan. Oh yea, the article forgot to mention one thing, agents are partly to blame for Citizens being unprofitable, because they are paying all those commissions out?
There are an estimated 45,000 policies going into Citizens a month, agents receive less than 6.9% commissions (because half the fees and premium are not commissionable), the panel proposed two solutions pay the agent a flat $25 fee or a $100 flat fee. With all the underwriting requirements Citizens mandates, how can an agent afford to write a policy for $25 fee? What a genious proposal from bureaucrats. Citizens was an ill conceived under funded program that the State of Florida had no business being in!
Tom
you sound like you are on the front line dealing with this issue.
Surely you have run into the morons that have a 3,000 square foot house built on the waterfront and cant understand why their insurance for the same sized house in Chicago was only $2000 and it\’s $12,000 in Florida.
These same rocket scientists are also unable to grasp the fact that while a 100 year old home is not even remotely unusual in Chicago its unheard of in Florida. It\’s as if the loss frequency is the same for Chicago and Florida.
These same einsteins then elect some of the most liberal and amoral judges in the country who pretty much interpret the policy contract any way they want without regard to what actually was purchased. Add to the mix a bunch of lawyers milking the system for all it\’s worth.
Then take all of these geniuses and mental incompetents and have them vote in people who are going to \”solve the problem\” and its no wonder that this mess is as bad as it is.
The only solution is let the market charge whatever it wants. Make the buyer become educated and let the companies make the money necessary to take on the big, big risk associated with Florida. They will come but they will demand an excess profit since great risk demands great returns. Otherwise they will just offer their insurance product in lower risk areas that are much more predictable.
Once again the responses to this article are putting the emphasis on \”beachfront\” proeprty and not the problem as a whole. There are no properties in Florida that are safe from Hurricane damage. Just look at 2004\’s 4 storms that cris-crossed the central Florida area. More than 75% of the insured losses occured in \”inland\” areas and non-coastal counties like Orange, Seminole and Lake (Orlando area). This problem is Statewide, not just on the beach. Having ther State manage a catastrophy insurance product like the windpool is far more advantageous than having the State in the full blown insurance business. Let\’s take the catastrophy potential out of the picture and let the insurance industry do what it does best…insurance.
Harcourt you hit the nail on the head – Let the market charge whatever it wants. And that is the most misunderstood statement, because insurance companies will not charge a zillion dollars, they will charge whatever the actuarial sound price is for that particular risk. The government does not need to be in the insurance business, now people expect the government to resolve the insurance issue.
FL Retail Agent has it right. I live in Monroe County and in the 8 years I have lived here the only hurricane to hit and do substantial damage was Wilma. Yet for years Monroe county has paid the highest retes in Citizens. Monroe county has the highest building codes in the state and we still have the highest rates.
We now have a grassroots watchdog in Tallahasse as we speak, FIRM (Fair insurance rates in Monroe) who are talking to the legislature and Gov. Christ with real solutions.
I am not a wealthly, waterfront homeowner. My wind only premium is roughly 10% of my gross income. The rates in FL need to be adjusted because the state as a whole is a hurricane risk as FL Retail Agent pointed out.
I forgot to mention, that the majority of claims for Wilma in Monroe County were for flood and not wind.
My beachfront home had a leak in the bathroom \”hurricane\” window during Francis and Jeanne. Thank God, that\’s all the damage I had. My rental triplex over in Highlands County, which is in the middle of the state and eighty miles from the beach, lost a few shingles from Charley, a bunch more from Francis, and was decimated 2 weeks later from Jeanne. Why the difference? New building codes. Every building in the state has hurricane exposure. That\’s why Fla. Retail Agent\’s idea is so compelling.
The state has the ultimate risk, especially when private insurers go bankrupt. They can write the laws to strengthen the building codes and mitigate the damage from wind. They can borrow money cheap, and if necessary, have the power to tax.
The private insurers don\’t want the exposure to the catastophic risk. Who can blame them? Just as the Feds took over flood insurance, the state should take over the windstorm insurance.
And LL, you deserve to get paid for your work. I know I\’m very appreciative of my agents and their efforts on my behalf.