I think it is absolutely ridiculous for Floridians/Businesses to be forced to pay for claims of insurance companies (such as Poe). How did they receive their rating unless they had cash reserves on hand? You have all of these high paid Corporate Officers making loads of money and we have to pay for the shortfall?
We also have to pay for the shortfall of the state fund.
I agree, the state needs to restructure their budgeting to make sure they have enough. What happened to all the money the insurance companies were making on premiums for the 20 years prior to 2005 when we didn’t have recurring hurricanes?
In my opinion, the state needs to issue one flat tax for everything. No more surcharges and taxes for each thing. One tax amount which needs to include everything (including healthcare) and then leave the people and the money they make alone. The $ is taxed when you make it, it is taxed when you put it in the bank, it is taxed when you spend it, and it is taxed and surcharged when you pay bills with it. It is so ridiculous. Our government needs to really restructure many many things.
This article makes it sound like the Cat Fund and the Guaranty Association are the same entity.
The Florida Insurance Guaranty Association is the entity that pays the claims of insolvent companies, such as Poe. EVERY STATE has a similar organization. They serve to help make sure that the policyholders get most of what they paid for in the event of an insolvency.
The Cat fund is a reinsurance program that the Florida government mandates every insurer offering property coverage buy into. It provides reinsurance for hurricanes at discounted (read “inadequate”) rates. The inevitable shortfalls are paid for be after-the-fact assessments. Were it not for the cat fund, the assessment Florida residents are paying now would have been paid for ahead of time. The total cost is the same, only the timing is different.
Oh, and Robin – all the money that insurers made in Florida on property lines in the years when there were no hurricanes was consumed in 2004 paying for those storms. Private companies and the Cat Fund both pay through the nose when a storm hits.
ok i understand about the solvency problems, but then again, that should be based on the curr owners at the time of the loss. if we are at a shortfall over $600 million, then why are we going after those who have moved into florida to pay for past events where there was not enough money? i expect to see some folks fight this one in court. if i moved to fl in 2008, why should i help pay for the losses in 2005? i should be responsible to help pay for any losses after 2008. this is my concern.
I was born in 1966. Why should I pay social security taxes to provide retirement income today to those born before me?
Today, a dollar goes out of the system the day it goes in.
Come On…….?
well, if you think about it, that is also for you as well. different than handling claims and they are short funding because they did not look into the future with a crystal ball. funny how the state thinks it knows more about insurance than the insurance company.
Ratemaker, I am very aware and educated on the Florida Guaranty Fund and the CAT fund surcharges being separate. I deal with this everyday. I just don’t agree with it.
The monies for the premiums of the prior 20 years without any recurring hurricanes was not spent and exhausted by insurance companies in 2004. I receive many financial and P&L reports from insurers which were completed and audited by their respective CPA’s, and most insurance companies in 2004, 2005, and 2006 still made a profit…just not in the margins they were accustomed to. This is the exact reason Allstate is in the hotseat.
If AM Best is going to rate you with A++ and they certify you have such funds to cover catastrophic events, then that insurance company along with it’s reinsurance company need to pay until the very last dollar is spent. If it closes your doors, it closes your doors….but to the very last penny – before you even access $1 from the residents.
Ratemaker: I would be willing to say that the recently past President of Poe(which we both know is now insolvent) and all corporate officers of that company have more money in the bank on this date than you and I together. As well, they are more than likely living in more elaborate homes than you or I, and lastly driving a more luxurious car than you or I.
wudchuck is right, Florida needs to let insurers rate for exposure. This would raise everyone’s rates but claims would be covered and you wouldn’t have people paying for claims that happened before they joined the risk pool.
Back to the “new-comers” paying for past problems. Don’t you think that anyone with any sense should realize, with all of the past and current publicity, that they are moving into an insurance/government nightmare when they move to Florida ? Caveat emptor.
First, If you live south of Orlando, on either coast there is less “risk” today than ever before. The series of hurricanes has forced structual modifications and upgrades to take place. In fact, if H Wilma were to hit today, there would be roughly 65% less $$$ damage done than before due to new roofs, windows, doors, etc. and building code changes that followed.
Second,the state and the industry should be pushing harder, the incentives and grants, for upgrading and protecting your home during a storm. The MSFHP just didn’t get it done. But the relationship between the state and the industry is like the ex-girlfriend in the same room with your wife.
As for the potential bail-out of Poe and Citizens, remember that these are the dwellings that nobody else will/would insure. Not necessarily waterfront properties either. These are older homes that can’t pass a Four Point Inspection or insured because that is the only carrier the agent can write for. If we want to make it fair to all, then the carriers should have to write statewide with no exceptions. If the home is a higher risk, then pay the premium for it. Stop the surcharges. But we really don’t know the risk because the Wind Mitigation Verification isn’t mandated for all windstorm policies. Therefore, the industry and state has no idea what their true risk $$$ are.
In addition, yes the elderly do have a position to complain about premiums. They’re typically on a fixed income and have watched their premiums increase over 150% in the last 3 years… as all of us.
As for Hurricanes being a risk or a scheduled event. I have to disagree to both. You have a better chance of suffering damage in California from an earthquake than a hurricane in Florida. So why not give the homeowner the option not to carry windstorm. I speak with homeowners all the time that have been insured for 40 years, in Broward, and have never had a claim. Let them throw the dice as long as they understand the consequences of not having coverage.
If you really want rates and risk to drop, then let’s stop mandating wind coverage. Californians aren’t mandated to carry “earthquake” coverage.
Robin, Please don’t be so shortsighted. I’m sorry but you need to understand that you can’t look at 3 or 4 years of profits. The one big storm that hits every 20 years or so wipes out any profit made in preceding years. The goal is for carriers to make profit 19 of 20 years so they have surplus built to pay for the big storm. If you look at Homeowners profitability over time, it is a big money loser.
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I think it is absolutely ridiculous for Floridians/Businesses to be forced to pay for claims of insurance companies (such as Poe). How did they receive their rating unless they had cash reserves on hand? You have all of these high paid Corporate Officers making loads of money and we have to pay for the shortfall?
We also have to pay for the shortfall of the state fund.
I agree, the state needs to restructure their budgeting to make sure they have enough. What happened to all the money the insurance companies were making on premiums for the 20 years prior to 2005 when we didn’t have recurring hurricanes?
In my opinion, the state needs to issue one flat tax for everything. No more surcharges and taxes for each thing. One tax amount which needs to include everything (including healthcare) and then leave the people and the money they make alone. The $ is taxed when you make it, it is taxed when you put it in the bank, it is taxed when you spend it, and it is taxed and surcharged when you pay bills with it. It is so ridiculous. Our government needs to really restructure many many things.
This article makes it sound like the Cat Fund and the Guaranty Association are the same entity.
The Florida Insurance Guaranty Association is the entity that pays the claims of insolvent companies, such as Poe. EVERY STATE has a similar organization. They serve to help make sure that the policyholders get most of what they paid for in the event of an insolvency.
The Cat fund is a reinsurance program that the Florida government mandates every insurer offering property coverage buy into. It provides reinsurance for hurricanes at discounted (read “inadequate”) rates. The inevitable shortfalls are paid for be after-the-fact assessments. Were it not for the cat fund, the assessment Florida residents are paying now would have been paid for ahead of time. The total cost is the same, only the timing is different.
Oh, and Robin – all the money that insurers made in Florida on property lines in the years when there were no hurricanes was consumed in 2004 paying for those storms. Private companies and the Cat Fund both pay through the nose when a storm hits.
ok i understand about the solvency problems, but then again, that should be based on the curr owners at the time of the loss. if we are at a shortfall over $600 million, then why are we going after those who have moved into florida to pay for past events where there was not enough money? i expect to see some folks fight this one in court. if i moved to fl in 2008, why should i help pay for the losses in 2005? i should be responsible to help pay for any losses after 2008. this is my concern.
Hey Wudchuck:
I was born in 1966. Why should I pay social security taxes to provide retirement income today to those born before me?
Today, a dollar goes out of the system the day it goes in.
Come On…….?
well, if you think about it, that is also for you as well. different than handling claims and they are short funding because they did not look into the future with a crystal ball. funny how the state thinks it knows more about insurance than the insurance company.
Ratemaker, I am very aware and educated on the Florida Guaranty Fund and the CAT fund surcharges being separate. I deal with this everyday. I just don’t agree with it.
The monies for the premiums of the prior 20 years without any recurring hurricanes was not spent and exhausted by insurance companies in 2004. I receive many financial and P&L reports from insurers which were completed and audited by their respective CPA’s, and most insurance companies in 2004, 2005, and 2006 still made a profit…just not in the margins they were accustomed to. This is the exact reason Allstate is in the hotseat.
If AM Best is going to rate you with A++ and they certify you have such funds to cover catastrophic events, then that insurance company along with it’s reinsurance company need to pay until the very last dollar is spent. If it closes your doors, it closes your doors….but to the very last penny – before you even access $1 from the residents.
Ratemaker: I would be willing to say that the recently past President of Poe(which we both know is now insolvent) and all corporate officers of that company have more money in the bank on this date than you and I together. As well, they are more than likely living in more elaborate homes than you or I, and lastly driving a more luxurious car than you or I.
wudchuck is right, Florida needs to let insurers rate for exposure. This would raise everyone’s rates but claims would be covered and you wouldn’t have people paying for claims that happened before they joined the risk pool.
Back to the “new-comers” paying for past problems. Don’t you think that anyone with any sense should realize, with all of the past and current publicity, that they are moving into an insurance/government nightmare when they move to Florida ? Caveat emptor.
Some of you need to take a breath.
First, If you live south of Orlando, on either coast there is less “risk” today than ever before. The series of hurricanes has forced structual modifications and upgrades to take place. In fact, if H Wilma were to hit today, there would be roughly 65% less $$$ damage done than before due to new roofs, windows, doors, etc. and building code changes that followed.
Second,the state and the industry should be pushing harder, the incentives and grants, for upgrading and protecting your home during a storm. The MSFHP just didn’t get it done. But the relationship between the state and the industry is like the ex-girlfriend in the same room with your wife.
As for the potential bail-out of Poe and Citizens, remember that these are the dwellings that nobody else will/would insure. Not necessarily waterfront properties either. These are older homes that can’t pass a Four Point Inspection or insured because that is the only carrier the agent can write for. If we want to make it fair to all, then the carriers should have to write statewide with no exceptions. If the home is a higher risk, then pay the premium for it. Stop the surcharges. But we really don’t know the risk because the Wind Mitigation Verification isn’t mandated for all windstorm policies. Therefore, the industry and state has no idea what their true risk $$$ are.
In addition, yes the elderly do have a position to complain about premiums. They’re typically on a fixed income and have watched their premiums increase over 150% in the last 3 years… as all of us.
As for Hurricanes being a risk or a scheduled event. I have to disagree to both. You have a better chance of suffering damage in California from an earthquake than a hurricane in Florida. So why not give the homeowner the option not to carry windstorm. I speak with homeowners all the time that have been insured for 40 years, in Broward, and have never had a claim. Let them throw the dice as long as they understand the consequences of not having coverage.
If you really want rates and risk to drop, then let’s stop mandating wind coverage. Californians aren’t mandated to carry “earthquake” coverage.
Robin, Please don’t be so shortsighted. I’m sorry but you need to understand that you can’t look at 3 or 4 years of profits. The one big storm that hits every 20 years or so wipes out any profit made in preceding years. The goal is for carriers to make profit 19 of 20 years so they have surplus built to pay for the big storm. If you look at Homeowners profitability over time, it is a big money loser.