Everyone likes to search the Home Insurance quotes based on price and they do not seem to care about coverage’s.Agents who only sell Citizens w/ no other carriers never tell people the true story either and State Farm agents are very guilty of this. Most people are not told about the ability of Citizens Insurance to charge 15% from each of the 3 Citizens Carriers at any time for any financial reason. If a Hurricane comes, not only will you have your 2% deductable to worry about and getting a differant carrier will be nearly impossible as well. You also have to deal w/ a surcharge that could be 3 times what the article here is talking about.Once this surcharge hits you, you can never walk away form it like before because the new Property Insurance Bill just signed by Governor Rick Scott insurs that Citizens Insurance collects it’s fees. This power was given to them by the Legislators in Tall. as well as the OIR and the Insurance commissioner. Most of the people on the board of Citizens are not even experienced in the industry so they have no real working knowledge as to why things happen. Please read the full article by Julie Patel of the Sun Sentinal and please call L & S Insurance for all of your Home, Auto, Flood, Commercial and Life Insurance busienss.
State Farm updates
June 17, 2011
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June 7, 2011
Both State Farm of Florida and Universal P & C both received poor ratings from Weiss ratings. The Insurance carriers are weak although reserves meet all the state of Florida requirements, but the parent companies of each are in good financial condition. State laws set up by our Legislators in Tall. have ok’d the MGA’s to be exclusive from review which makes no sense at all, but neither do the Legislators.Weiss’s ratings are based on Reserves and although Universal has 110 Million in reserves, this is only because of the huge rate increases they have taken over the last 2 years, the most recent being March 2011. State Farm’s newest increase kicks in July and it is a doosy so the reserve number’s will not be known for a while. At our agency L & S Insurance we have received so many calls from State Farm clients very upset w/ the new rates from July and beyond and I tend to agree. Now we are in Hurricane season and there is little many can do as the capacity issues come from reinsurer’s and the markets always tighten up during Hurricane season and lighten up near the end if all looks better at that time.At least they are not like Argus Insurance and being shut down in 45 days w/ no advance warning.Most of them if not all wil have to go into Citizens Insurance which wants to reduce their exposure as well. This was all due to re-insurance issues that were all well known by the OIR, but never acted upon till last minute putting all of our clients at risk. Please read the full article below by Julie Patel of the Sun Sentinal and please contact L & S Insurance for your Home, Auto, Flood, business and Life Insurance quotes;
May 13, 2011
An article by Julie Patel of the Sun Sentinal on the reality of Home Insurance in Florida. 15% / year increase will allow Insurance to double in 5 years and who can afford that or why would people move to Florida knowing this. This is what Governor Rick Scott asked for in his campaign and this is what the Legislator’s in Tall approved last weekend. Now it will be passed into Law in a few weeks. Soon the Citizens Insurance bill will also pass and be signed and 2012 should have some of the highest Insurance rates ever in Florida. They say, that in time, competition will happen w/ higher premiums and some big Companies like State Farm, Allstate and other’s come back to the Florida marketplace. This may happen, but I am doubtfull and this will not be a good solution for Floridians, but great for the Big Insurance carriers. Please read the article by Julie Patel below and remember to contact us at L & S Insurance on this Blog page for Home, Auto and all Insurance quotes.
May 10, 2011
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|This Blog below is from Jeff Grady of the FAIA(Florida Association of Independent agents). Jeff talks about my comments which are how can property Insurance reform happen if the Citizens Insurance bill did not pass? The entire objective was to eliminate Citizens Insurance in 4 years and to bring more Home Insurance carriers to Florida.State Farm, All State, Nationwide and many other’s will not return until Citizens is priced as the last and highest insurer. Citizens needs to be priced to be on the high side and not competitive.Our legislators are applauding what they did, but in Tallahassee all they did is like usual, create a bad situation by not doing al that needs to get done. How can this happen if Citizens is not only competitive, but very resonable now. With rates only scheduled to increase 10% next year, and other carriers are at 30% or so, everyone will want to go to Citizens and the 1.4 million policy holder’s in Citizens will not shrink, but grow substantially.Please read jeff grady’s Blog and remember to call L & S Insurance for alll your Home Insurance and auto Insurance quotes as well. Please contact us on this blog Page;
Posted by Jeff Grady on May 10th, 2011 8:51am
|Whew! The session is finally over and many ideas, good and bad, have effectively been laid to waste. One that now resides in the proverbial scrap pile is a Citizens reform bill that FAIA continues to believe is essential to accomplishing comprehensive property market reform in Florida. While agents and the industry should rejoice over the passage of SB 408, it is my view that only half of what was sorely needed actually got done.
Remember, the goal proclaimed by most policymakers and industry insiders was to restore fiscal health and stability to the private market AND attract new capital to Florida by diminishing the super-competitive stance of Citizens. Mission accomplished on the first part: SB 408 is indeed a much stronger version of the two previously vetoed property reform bills and will undoubtedly go a long way toward curing Florida’s newfound sinkhole epidemic that has effectively raided carriers’ claims paying capacity for future storms. Further, the bill tries to make Florida more like the rule rather than constantly being the exception. Restoring the RCV holdback provision, reducing the 5 year claims filing window, providing for expedited rate filings to recoup reinsurance costs, etc., represent a good start to making our property insurance market a more sensible place for insurers to do business. As an added bonus, the FAIA drafted language to exclude agent commissions (acquisition costs) from overzealous regulation also passed as part of SB 408. No longer will the regulator be able to “directly or indirectly” dictate what a company can pay its agents…not necessarily a problem that exists today, but definitely a solution that should prevent such from occuring again.
So what about the second part: Citizens reform? While FAIA lobbyists were able to assist in the exportation of a few significant provisions from the Citizen’s bill and successfully amend them to SB 408, the truth is the most meaningful language regarding rates and coverage was scrapped and left for another Legislature to tackle. I believe this adverse development leaves the stated policy goals for property insurance reform unfulfilled. Said another way, how can Florida expect to attract new capital to its residential homeowners market when the state’s own insurer represents such fierce competition? How will private companies realistically be able to remove material numbers of Citizens’ approximately 1.4 million policies when every insurance expert (including Citizen own actuaries) publicly acknowledges the company’s rate inadequacy of 40-50%? Remember, Citizens policyholders have the right to decline a take-out offer. Couple that with the memory of a horribly failed regulatory experiment which required take-out companies to maintain Citizens rates for up to three years after removal, and the task of depopulating the state-sponsored insurer via new capital formation looks daunting.
In the meantime, Florida’s homeowners market is going through a reinsurance transformation that once again, will make Citizens a competitor like no other. Two things are primarily responsible for this recent change: capacity constraints stemming from Japan’s Earthquake/Tsunami and the new RMS Catastrophe Model which projects much higher potential losses to Florida’s inland counties from hurricanes. Bottom line…reinsurance rates are headed higher and it will likely take more of it to cover the same portfolio, particularly for those companies that have seemingly done the right thing and balanced their coastal exposure with business from inland parts of our state. Realize, the use of the RMS model is largely dictated by the reinsurance industry when they offer terms to private insurers. While Florida’s Hurricane Methodolgy Commission has yet to approve the use of the new RMS model when companies are seeking rate changes, the reinsurance world doesn’t necessarily revolve around Florida…rating agencies also have a very big say here. Thus, several carriers are already pricing for these factors and setting their rates accordingly. That fact is evidenced by a bevy of recent announcements from property insurers that limit capacity in inland counties, while also increasing rates for those risks.
Now, consider this…Citizens will experience practically none of the aforementioned problem. Why? Because it isn’t required to purchase reinsurance! Yes, there is indeed another proposal on the table for Citizens to possibly acquire reinsurance for the 2011 storm season. But (and it’s a big “but”), the proposed coverage is only for the HRA account and would only change Citizens’ storm worthiness to be able to cover the 1 in 34 year event. This is only a slight increase from its current capability of covering the 1 in 32 year event. Said another way, the Citizens reinsurance proposal would cost $107 million to provide only $500 million in coverage, and there is no provision for a second event. This hardly moves the needle in terms of squaring the reinsurance concerns of the private market with those of Citizens. Thus the “super-competitor” lives on and makes the idea of new capital formation around Citizens takeouts look doubtful.
With all of that said, there is one more noteworthy deterrent to returning Citizens to its original purpose of a residual property market. That one can best be seen by looking at the constituency Citizens has effectively gained over the years by offering a public subsidy. Noticeable in that group are consumer groups like FIRM (Fair Insurance Rates for Monroe County), legislators from coastal or sinkhole prone areas, and finally, agents who never wrote a property policy prior to gaining an appointment with Citizens. Indeed, the appeal of government subsidized insurance is a powerful elixir. These groups are organized and fight hard for Citizens’ right to exist in its current form. In doing so, they seem only so happy to burden Florida’s taxpayers with the real cost of the insurance they buy or sell…an eventuality sure to come again without a significant change in course.
So, what this all means is there is still much work to do to restore Florida’s property market. This is not to suggest that Citizens should go away. I do not believe that is possible, as there will always be some portion of our state’s catastrophic wind exposure that private insurers will simply leave uncovered. But, that fact in no way justifies the footprint Citizens currently lays down in our marketplace. It’s irresponsible, it could be very costly in the future and thus, I remain faithful that a comprehensive bill to reform Citizens will ultimately occur.
Jeffrey W. Grady
Florida Association of Insurance Agents
850-893-4155 ext. 379
CONFIDENTIALITY NOTE: The information contained in this email message is legally privileged and confidential and is intended only for the use of the individuals or entity named above. If you have received this email in error, please notify FAIA by telephone.
May 2, 2011
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Whoever wants to be in Citizens Insurance should read this first. Many have no chaice and many have choices that they do not take or do not know about? How could this be you ask??? Well, Florida law states that the agent only needs to tell the client about the products they have to sell and not what may be available in the marketplace otherwise. An MD could go to jail for this, but not Insurance agents. When you consider that some agents only sell Citizens and therefore cannot give a client a true scenario of what options exist you can see that our system is questionable at best. As an example State Farm agents only sell State Farm products and Citizens Insurance in Florida. They can only quote Citizens by State Farm policy and heaven forbid this company goes away as our new Governor Rick Scott seems to want to do, our Insurance industry would be more of a disaster then it already is. Please read this article by Senator JD Alexander in a response to Paige St. John’s article on Citizens and please remember to contact L & S Insurance on thisBLOG page for all your Insurance quotes;
April 29, 2011
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Ina Cordle of the Miami Herald found me(Lee Gorodetsky of L & S Insurance) on a search for agents to talk to about this issue and I was happy to answer her questions on what is going on. She talks about Citizens Insurance, rate hikes, Hurricane season and the Legislators in Tallahassee as well as the Governor and CFO of Florida as well. I was able to have 2 of my clients interviewed including someon who is buying a home from another state and another that is being non renewed by State Farm after 20 plus years with them. Home Insurance is certainly a tough issue these days, but please enjoy the article we helped provide info for and please call L & S Insurance for all of your insurance quotes and needs.
April 25, 2011
Here we go w/ the last minute posturing!!! Senator Fasano sent a letter to Governor Rick Scott and Senate President Mike Haridopolous asking this process be holted and and a full hearing should take place to determine what really should happen. Apparantly Governor Rick Scott also wants to eliminate Citizens in 4 years or so and force every one back into private carriers which would include Surplus lines. These are not state of Florida guaranteed and could leave thousands out to dry in hurricane or disaster just like what happened at Hurricane Adrew in Homestead in 1992. As if this was not enough Governor Scott and Senator JD Alexander also wants to change the name of Citzens to “Taxpayer Funded Property Insurance program” so everyone understands who really pays the bills! This bill is spoonsored by Senator Alan Hays and you have to wonder what they are all thinking about up there. Rates have to go up, that seems apparant, but the other things they are trying to do it is no wonder that the big Insurance carriers do not want to be here like State Farm and Allstate as we have this type of congress trying to do such weird things like this.What a welcome to Hurricane season w/ any news like this. Please call L & S Insurance for all your Insurance quotes and please enjoy the article from Tampa Bay.com and the Sarasota Herald Tribune.
April 11, 2011
State Farm asked for bigger rate hikes and finally had this one approved, but it is a step in the right direction for them and will average 18% for the entire state, but will really hit S. Florida hard! The Office of Insurance Regulation approved the hike and Insurance commissioner Kevin McCarty said they proved their case w/ claim issues in Florida and the need for the hikes was necessary. The increases will start in July of 2011 and that means the bills going out starting in a few weeks will reflect these new hikes. I guess this is good news for those like L & S Insurance who can quote many carriers and try to help many of these people save money when the renewal comes up. The real issue will be that this is happening just as Hurricane season is under way, so it will be hard for many to get coverage at a reasonable price because of lack of capacity during these times from many Insurance carriers. Many companies are taking hikes like this so this will even the playing field for independent agents. Please read the full article by Julie Patel of the Sun Sentinal and please call L & S for all your Insurance needs.
March 7, 2011
Senate Republican Alan Hays and Republican State Rep Jim Boyd propose many changes in Citizens which include rate hikes at 25% /year instead of the 10% cap it now has. Also, to be able to go to Citizens, the rate must now be at least 15% cheaper than a regular company,but it could change to 25% which would make most homes almost always ineligable. Homes that are over 500K in coverage by 2016 and soon to be 750K all being non renewed so they can go to the private markets over the next 5 years as well. Lastly a big one would be that no public adjustors could get involved in Citizens Insurance claims. Wow!!!!!!!!!!!!!!!!! This is a lot to handle and the public will be in an uproar. I do not yet know how the 25% rule will be enforced, but if they find a way, most will not be eligable for Citizens for 1 reason or another or would they want to be there. I also wonder what will happen to the agents of State Farm who can only write Citizens at this point in time? Thye will loose a lot of business to competitors and I do not believe the corporation State farm will be happy with this scenario in Florida. I also know the Public adjustors have a huge lobby and they will not be happy either, so this is far from done.This session will be a big one in Tallahassee for our Legislators and our Governor as well. Please read the following article by Julie Patel and please remember to contact us for quotes at L & S Insurance. We still reprsent about 15 carriers including Citizens to shop out all the best rates for your home.
March 3, 2011
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Wow!!, I wish I made the taxes on those profits!!! Now I understand why people are simply upset w/ the Insurance industry.All that money and they want another 28% statewide increae in Rates here in Florida. Where does it end and how much do they have to make so no increases are necessary?? Hurricane season is already getting close and all Insurance companies are starting to get ready for the season and it’s challanges. Please read the full article on State Farm and please call L & S Insurance to shop for the best rates in Florida for your Home, Auto and business and commercial policies.