Florida Homeowner Insurance Relief - Six Months Later

Well, it's been six months since Gov. Crist signed legislation intended to help Florida homeowners burned by skyrocketing home insurance bills. A review of the situation shows it did not quite turn out like the politicians in Tallahassee thought it would.

State officials promised Florida residents that rates would begin dropping by 25% on the average since the new law permits insurance companies to purchase cheaper state-backed reinsurance and then pass those savings on to their policyholders. In fact, it appears that all the state managed to accomplish with this reform was to take on the extra risk to provide the reinsurance ($12 Billion), and then put Florida taxpayers on the hook for that money too.

A review of the proposed new rates submitted by insurers to the State so far this year shows the following:

• An average 30% increase from the Florida Farm Bureau.
• A 95% increase from Sentry Insurance.
• 54% from USAA (Florida's fourth largest insurer) - which insures military families.
• State Farm (the state's second largest insurer) - a 7% decrease after it announced the dropping of 50,000 existing Florida policy holders.
• The state's filing period for such requests runs through September and more than 100 companies have yet to file.

Our own personal experience has been one of increases and frustration also. While we received a $250.00 credit for a reduction in our carrier's (USF&G) reinsurance, our rate increased by 30% and the annual underwriting fee (which just started last year) also increased by 40%. Add in the increase to our wind insurance deductible (from $9,750 to $13,750) and it's easy to see how the so called insurance "relief" has been non existent.

In response to the situation, Gov. Crist called for investigations and requested lawmakers consider subpoenaing insurance executives to testify before the Legislature. Many representatives are also calling on the Governor to add the insurance issue to the Legislature's special budget session scheduled for next month.

Florida's Chief Financial Officer Alex Sink went a little further, calling for an investigation of the experts who estimated the property insurance savings and also suggested that lawmakers repeal the reinsurance changes included in January's bill.

Insurance industry representatives and lobbyists are scoffing at such suggestions and say they must have cash on hand to pay out claims for future big storms.

And, so it goes with Florida's insurance relief. Everyone lays blame somewhere else and the residents of Florida continue to suffer under the weight of what appears to be a never ending cycle of rate increases.

For information on insurance coverage in Florida, please visit our homeowner's insurance guide or contact us at Gulf Coast Associates. We'll be happy to assist with any questions you may have.

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