The Home Insurance Guru

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Given everything that has happened in 2020, New Year’s resolutions for 2021 will likely look different this time. Sure, plenty of people will vow to lose weight—maybe more so thanks to COVID stress eating.

The pandemic also will likely prompt many to resolve to be more financially prepared for the unexpected.

A great way to protect yourself, your loved ones and your finances is to have adequate insurance coverage—especially life insurance. So as you look ahead to the New Year, here are some possible life insurance resolutions.

Buy a Life Insurance Policy

Has buying life insurance been one of those things on your to-do list that you just haven’t gotten around to doing? An estimated 41 million Americans say they need life coverage but do not have it, according to the 2020 Insurance Barometer Study by LIMRA and Life Happens, industry-funded groups.

If you have loved ones who count on you for financial support, your top resolution should be to get life insurance to protect them if something happens to you.

In fact, there’s no need to wait until the New Year. Getting an affordable term life insurance policy can be fast and easy. There are online instant, fast life insurance options available from several companies such as Bestow, Ethos, Fabric, Haven Life and Policygenius that won’t require a medical exam if you’re young and healthy.

If you’re older or have some health issues, contact an independent life insurance broker. Brokers work with several insurance companies and will know which one can offer you the best policy at the best rate for your situation.

Make Sure You Have Enough Life Insurance

Even if you have life insurance, you might not have enough. As life changes so can your life insurance need, and your coverage amount may not be adequate anymore. Resolve to check your insurance policy to verify how much coverage you have, then consider the following:

• Do you only have a group life insurance policy through work? If so, the death benefit—the amount the policy will pay to your beneficiaries—likely isn’t enough to cover your loved ones’ needs if it is equal to only one year’s salary. Plus, you likely won’t be able to keep this supplemental life insurance if you leave or lose your job.
• Has your life insurance need changed since you bought your policy? Recalculate how much life insurance you need now, such as income replacement or covering a mortgage, large debts and college tuition for children. Subtract the assets you have to cover those obligations. The difference between the two is the gap you need to fill with life insurance.

• Evaluate your policy length. Also take a look at whether your current policy type is going to be able to go the distance for you. Perhaps you have a short term life insurance policy that now seems inadequate. Or perhaps your needs have evolved to a permanent life policy such as universal life insurance.

If your current term life policy is inadequate, you could buy a new, additional policy, or buy a larger new policy and ditch the current one. (Don’t stop paying on your current policy until a new policy is issued.) Get quotes for both options to see what makes sense.

Review the Performance of Your Policy’s Cash Value

If you have a whole life or universal life insurance policy, a portion of the premiums you pay go toward building cash value. In fact, that cash value feature might have been one of the key reasons you bought the policy.

But it’s important to keep tabs on that cash value, especially if you’ve been taking cash value loans or withdrawals. The company’s internal policy fees could lower the cash value enough to cause the policy to terminate. Resolve to ask your insurer or life insurance agent for an in-force life insurance illustration to see how your policy is performing and whether you need to take action to keep it in-force.

In particular, there can be problems with indexed universal life insurance. The fees on the policy could be draining the cash value if it’s earning a low rate of return. If the cash value drops too much, the policy could lapse.

You also might have much less cash value than you think if you’ve been using it to cover premium payments.

Review Your Beneficiaries

The main point of life insurance is to provide a financial safety net for your beneficiaries if something happens to you. But the best laid life insurance plans will go wrong if you don’t have the right people listed as primary and secondary beneficiaries.

It’s especially important to review and update your life insurance beneficiaries if you’ve gotten divorced, remarried or have had children (or more children) since you took out the policy.

Or perhaps your children are now grown and no longer count on you for financial support, so you would prefer to donate your life insurance to charity.

Resolve to double-check your beneficiary designations. If you need to make changes, ask your insurer for a beneficiary change form.

Make Sure Your Family Knows About Your Policy

Some people are reluctant to discuss their finances, including life insurance. But your life insurance beneficiaries won’t be able to claim the life insurance payout if they don’t know the policy exists. Resolve to inform them that you’ve bought this protection.

Beneficiaries don’t need the policy or policy number in hand to make a claim. They only need to know the name of the life insurance company in order to initiate a claim. Still, it’s good to inform them of the location of the policy so they don’t end up on a hunt for lost life insurance.

If you don’t have a copy of your policy, resolve to call your insurer to request one.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Policyholders who let their car insurance coverage to be automatically renewed are probably making a big mistake. Drivers should research the insurance market and look for better deals before renewal time arrives. Usually, insurance companies are sending renewal information 30-45 days before the renewal date. This period is enough for policyholders to analyze the insurance prices and to decide if they should remain with the current provider or they should look for another one.

Before making any major decision, drivers should consider the following:

• Drivers should check if all the info about them is updated. The new insurance rates should consider the recent major changes in the lives of the policyholders. Many of these changes can have a significant impact on insurance premiums. Events, like getting married, or getting a better job, can lower the costs of car insurance. If the insurer is not aware of these events, drivers should contact them and ask for updated insurance rates.
• Consider looking for another provider. If all info is correct, but the premiums have risen, then the policyholder is the victim of price optimization. This strategy is used by insurance providers on clients who are deemed to be less likely to look for better insurance deals on the insurance market. In this case, drivers should consider switching their carriers and look for better car insurance deals.
• Shop around for better car insurance deals. Comparing online car insurance quotes can help drivers find better car insurance deals. Brokerage websites will allow drivers to discover insurance offers made by multiple insurance providers that sell policies in their areas. Drivers who got the insurance policy they wanted can request the help of an insurance agent to further customize that policy and save more money on insurance.
• Check the discounts. Drivers who are considering switching their insurers should check the discounts provided by the current carrier. Bundling discounts can be really rewarding and drivers who combine the homeowner’s insurance with car insurance can save as much as 20%

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Given everything that has happened in 2020, New Year’s resolutions for 2021 will likely look different this time. Sure, plenty of people will vow to lose weight—maybe more so thanks to COVID stress eating.

The pandemic also will likely prompt many to resolve to be more financially prepared for the unexpected.

A great way to protect yourself, your loved ones and your finances is to have adequate insurance coverage—especially life insurance. So as you look ahead to the New Year, here are some possible life insurance resolutions.

Buy a Life Insurance Policy

Has buying life insurance been one of those things on your to-do list that you just haven’t gotten around to doing? An estimated 41 million Americans say they need life coverage but do not have it, according to the 2020 Insurance Barometer Study by LIMRA and Life Happens, industry-funded groups.

If you have loved ones who count on you for financial support, your top resolution should be to get life insurance to protect them if something happens to you.

In fact, there’s no need to wait until the New Year. Getting an affordable term life insurance policy can be fast and easy. There are online instant, fast life insurance options available from several companies such as Bestow, Ethos, Fabric, Haven Life and Policygenius that won’t require a medical exam if you’re young and healthy.

For example, a 20-year Haven Term policy, issued by MassMutual, with a $500,000 death benefit would cost about $19 a month for a 30-year-old woman in excellent health.

If you’re older or have some health issues, contact an independent life insurance broker. Brokers work with several insurance companies and will know which one can offer you the best policy at the best rate for your situation.

Make Sure You Have Enough Life Insurance

Even if you have life insurance, you might not have enough. As life changes so can your life insurance need, and your coverage amount may not be adequate anymore. Resolve to check your insurance policy to verify how much coverage you have, then consider the following:

• Do you only have a group life insurance policy through work? If so, the death benefit—the amount the policy will pay to your beneficiaries—likely isn’t enough to cover your loved ones’ needs if it is equal to only one year’s salary. Plus, you likely won’t be able to keep this supplemental life insurance if you leave or lose your job.
• Has your life insurance need changed since you bought your policy? Recalculate how much life insurance you need now, such as income replacement or covering a mortgage, large debts and college tuition for children. Subtract the assets you have to cover those obligations. The difference between the two is the gap you need to fill with life insurance.

• Evaluate your policy length. Also take a look at whether your current policy type is going to be able to go the distance for you. Perhaps you have a short term life insurance policy that now seems inadequate. Or perhaps your needs have evolved to a permanent life policy such as universal life insurance.

If your current term life policy is inadequate, you could buy a new, additional policy, or buy a larger new policy and ditch the current one. (Don’t stop paying on your current policy until a new policy is issued.) Get quotes for both options to see what makes sense.

Review the Performance of Your Policy’s Cash Value

If you have a whole life or universal life insurance policy, a portion of the premiums you pay go toward building cash value. In fact, that cash value feature might have been one of the key reasons you bought the policy.

But it’s important to keep tabs on that cash value, especially if you’ve been taking cash value loans or withdrawals. The company’s internal policy fees could lower the cash value enough to cause the policy to terminate. Resolve to ask your insurer or life insurance agent for an in-force life insurance illustration to see how your policy is performing and whether you need to take action to keep it in-force.

In particular, there can be problems with indexed universal life insurance. The fees on the policy could be draining the cash value if it’s earning a low rate of return. If the cash value drops too much, the policy could lapse.

You also might have much less cash value than you think if you’ve been using it to cover premium payments.

Review Your Beneficiaries

The main point of life insurance is to provide a financial safety net for your beneficiaries if something happens to you. But the best laid life insurance plans will go wrong if you don’t have the right people listed as primary and secondary beneficiaries.

It’s especially important to review and update your life insurance beneficiaries if you’ve gotten divorced, remarried or have had children (or more children) since you took out the policy.

Or perhaps your children are now grown and no longer count on you for financial support, so you would prefer to donate your life insurance to charity.

Resolve to double-check your beneficiary designations. If you need to make changes, ask your insurer for a beneficiary change form.

Make Sure Your Family Knows About Your Policy

Some people are reluctant to discuss their finances, including life insurance. But your life insurance beneficiaries won’t be able to claim the life insurance payout if they don’t know the policy exists. Resolve to inform them that you’ve bought this protection.

Beneficiaries don’t need the policy or policy number in hand to make a claim. They only need to know the name of the life insurance company in order to initiate a claim. Still, it’s good to inform them of the location of the policy so they don’t end up on a hunt for lost life insurance.

If you don’t have a copy of your policy, resolve to call your insurer to request one.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Compare-autoinsurance.org has launched a new blog post that presents a guide that can help drivers get the best car insurance policy.

For more info and free car insurance quotes, visit https://compare-autoinsurance.org/how-much-car-insurance-do-you-really-need/

Drivers who moved to a new state, or have recently bought a new vehicle, are probably searching for a car insurance policy. Every single driver has different coverage needs, budgets, and options available to them. To understand how much coverage they need, drivers should analyze their current situation, weigh their options, and then make an educated decision.

Before getting an insurance quote, drivers should follow the next steps:

•     List the coverage they have, want, and need. Knowing what is already insured will help the driver in the process of getting new insurance. Without going through this step, drivers might be tempted to pick up the cheapest offer, possibly wasting good money.
•     Learn about the coverage limits. When buying liability coverage, drivers can see them listed as 100/300/50. This is one of the more common auto insurance policy structures and is also the limit that most insurers currently recommend for liability coverage. The first two numbers represent bodily injury liability coverage and the third represents property damage liability coverage. This means that the insurance policy of a driver involved in an at-fault accident will pay up to $100,000 in injuries per person, $300,000 in injuries per accident, and $50,000 in property damage per accident.
•     Consider dropping coverage for older vehicles. Drivers of newer vehicles should not have more coverage on their older vehicles. Older vehicles are more likely to breakdown, have lesser safety features, cost more to repair, and are easier to steal. They also worth less, and in many cases keeping collision coverage doesn’t make sense. However, to protect their vehicles from theft, some owners purchase comprehensive coverage.
•     Consider adding family members to the policy. Anyone who lives under the same roof as the policyholder is eligible to be part of the family plan. When covering an entire family under one policy, the policyholder is eligible for multiple discounts. Also, if there is more than one vehicle in the household, the policyholder can get a discount for insuring multiple cars. Furthermore, the auto insurance policy can be combined with other policies such as homeowner’s insurance, health insurance, boat insurance, and more.

•     Consider the deductible limits. The deductible is the amount of money the policyholders need to pay before the insurance kicks-in. When buying an insurance policy, drivers should determine how much they can pay for the deductible. To keep car insurance costs to a minimum, drivers can choose the highest deductible. Premiums decrease as the deductible increases.

For additional info, money-saving tips and free car insurance quotes, visit https://compare-autoinsurance.org/

Compare-autoinsurance.org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Insured losses from natural catastrophes and man-made disasters in 2020 totaled $83 billion, Swiss Re reports. Losses from natural disasters accounted for over 90% of the total, racking up $76 billion in insured losses globally — a 40% increase from the year prior.

At $83 billion, 2020 is now the fifth-costliest year for the insurance industry since 1970, researchers note. In context with the year’s total global economic losses, insurance claims covered 45%, exceeding the ten-year-average of 37%, according to Swiss Re.

U.S. weather activity fuels losses

After the most active Atlantic hurricane season in recorded history, this figure doesn’t come as much of a surprise. However, despite the record-breaking activity through 30 named storms, losses were moderate, by comparison. Insurance claims from the year’s Atlantic hurricanes contributed $20 billion to the global insured loss total.

Wildfires, tornadoes and a record number of severe convective storms in the U.S. drove up insured losses considerably, as well.

2020 began with a continent on fire, in one of the worst wildlife disasters in modern history. The Australia wildfire crisis scorched more than 46 million acres after months of burns. The greatest insured loss drivers for wildfires in 2020, however, stemmed from U.S. activity in August.

More than 800 wildfires burned close to 6 million acres across California, Oregon and Washington in 2020, destroying thousands of structures and triggering billions in insured claims.

Around the world

Abroad, hail events in Australia and Canada in 2020 were responsible for a significant amount of claims, and at least $2 billion in insured losses. One event alone — a January hailstorm in southeastern Australia — caused insured losses exceeding $1 billion. Worse, Canada experienced its costliest hail event on record in Calgary in June, spurring losses of $1 billion.

Winter storms hit northern Europe in February, causing flooding, power outages and transport disruption that drove combined insured losses for the event past $2 billion.

Natural catastrophes set all kinds of records this year, but losses from these events were lower than anticipated. Swiss Re analysts explain part of the reason for this is where natural disasters hit this year. The impacted regions had more insurance cover in place, the report states, “providing vital support to the people and communities affected and enhancing their financial resilience.”

Another critical factor, Swiss Re notes, is the impact of climate change, which experts warn will continue to exacerbate secondary peril events as more humid air and rising temperatures create more extreme weather conditions, fueling wildfires, storm surges and floods.

”As with COVID-19, climate change will be a huge test of global resilience,” Jerome Jean Haegeli, Swiss Re Group Chief Economist, writes. “Neither pandemics nor climate change are ‘black swan’ events. But while COVID-19 has an expiry date, climate change does not, and failure to ‘green’ the global economic recovery now will increase costs for society in future.” said Jerome Jean Haegeli, Swiss Re Group Chief Economist.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Florida’s fluctuating and volatile private market may be instigating long-term policy growth for Citizens Property Insurance Corp. and creating serious obstacles to its position as the state’s residual insurer, according to a new study.

The 236-page “Exposure Reduction and Depopulation Opportunities Analysis,” report from a team at Florida State University’s Dr. William T. Hold/The National Alliance for Risk Management & Insurance looked at how Citizens’ exposure can be reduced and the participation of private market insurers increased so it could continue to fulfill its mission as a residual market insurer. In doing so, the report examined prior depopulation efforts of Citizens and the residual market insurers of other states to determine “what could be learned from past endeavors.”

The study also looked at how mounting losses in the state’s domestic insurance market may continue to impact Citizens’ policy count, which has been steadily growing since last year.

Citizens commissioned the report from FSU earlier this year at a cost of $265,266. The report was presented to the Citizens Board of Governors at its Dec.16 meeting.

“Effectively reducing Citizens exposure in the long-term can be accomplished by expanding the availability of coverage by private market insurers,” the study notes. “However, several actions must first be taken to improve the attractiveness of the Florida market.”

The FSU study says Citizens has seen an “observable growth” in its policy count this year from 443,228 policies in January to 511,005 by September – an increase of $111.7 billion in exposure to $133.5 billion. Citizens continues to grow by about 3,000 policies per week, the insurer said at its December meeting, with its total policy count now at about 537,000 as private insurers respond to market challenges by restricting capacity and raising rates.

Citizens doesn’t expect to see a turnaround any time soon after Florida carriers experienced a total of $1.2 billion in operating losses through the third quarter of 2020.

The insurer, formed in 2002 by the Florida Legislature, has had a history of policy count growth and reduction throughout its tenure. It reached a high of 1.4 million policies that accounted for 23% of the state’s insurance market in 2011 before depopulation efforts, a steady private market and an 11-year hurricane drought brought the insurer to its lowest point of 440,000 policies in 2015. At its peak in 2011, Floridians were on the hook for $11.6 billion in assessments, a charge every Florida residential policyholder paid to ensure Citizens could cover losses in the event of a 1-in-100-year storm.

In 2015, Citizens was able to eliminate assessments for Florida consumers, thanks to depopulation efforts, the reinsurance market and catastrophe bonds.

But in recent years, the state’s private insurance market has grappled with unprecedented losses from litigation and catastrophic events that has led to rising rates and a pullback in capacity for the property insurance market. Because Citizens’ rates are capped on a statutorily required glide path of 10% per year, meaning the company cannot raise them more than that, the residual insurer is becoming a 

“Over the past 18 months, Citizens has become the insurer of first resort,” said Chairman Carlos Beruff at the December board meeting. “This is not its statutory mission and we must take steps immediately to reverse this trend and protect Floridians who are ultimately on the hook if Citizens is unable to pay claims.”

Market Hindrances to Health of Citizens

FSU’s report identified seven market hindrances that must be addressed for Florida’s insurer of last resort to further reduce its exposures, respond to market constraints and protect its customers.

Those hindrances include:

• Florida’s catastrophic risk exposure
• Levels of uncertainty in predicting future catastrophic losses
• High levels of catastrophic risk that lead to inadequate investment returns for investors and other factors that raise the cost of capital
• Volatility in legislative/regulatory/administrative actions that add to market uncertainty
• Third party involvement/litigation/fraud that is contributing to losses and expenses of insurers operating in Florida
• Inaccurate rates (glide path) that can lead to market distortions and competitions between Citizens and private market insurers
• The issue of affordability in the ratemaking process that can lead to misunderstanding and market distortions.

FSU said several notable events have “heightened concerns regarding market disruptions which could result in a large increase in Citizens’ exposure,” including:

• Catastrophes between 2016 to 2018 that resulted in a total of $19.84 billion in insured residential property losses and led to a hardening reinsurance market
• Adverse loss development or “loss creep” that was not initially anticipated
• Social inflation/third party involvement in claims in the form of assignment of benefits (AOB) lawsuits
• Potential for insurer ratings downgrades from financial analysis firm Demotech
• Recent insurer rate filings, starting in 2019, of greater than 15% and indications of a trend towards more double-digit rate increases
• The COVID-19 pandemic that has raised concerns for insurance and reinsurance industries, caused uncertainty in the markets
• Developments during the 2020 hurricane season, including the tightening of the reinsurance market; pricing concerns with the Florida Hurricane Catastrophe Fund (FHCF); action against attorney Scot Strems; and the most active hurricane season on record

Historical Shifts in Florida Market

The report notes that the number of insurers operating in Florida has declined from 290 in 1995 to 165 in 2019. During that time, the state’s market share has fluctuated and shifted from being made up of predominantly national carriers to mainly Florida domestic companies that formed after the 2004, 2005 hurricane season. In 2004, Citizens wrote 15% of policyholders in the state while Florida-based domestic companies wrote 22%, and national writers, as well as their affiliates, wrote 63%. In 2019, Citizens wrote 4% of the policyholders while Florida-based domestics write 72% and national writers plus their affiliates wrote 24%, “indicating that Florida has seen a dramatic shift in market structure over the last 15 years,” the report says.

“The Florida property insurance market has evolved from being a market dominated by large, diverse national insurers with significant surplus to a market dominated by smaller, geographically focused insurers. This has resulted in an increasing reliance on the global risk transfer markets and the FHCF [Florida Hurricane Catastrophe Fund] for diversification and risk capital,” the study says.

As such, market capacity and costs are highly influenced by events that take place in the Florida market, and negative events will ultimately increase Citizens’ exposure and threaten its surplus.

The study says that by the end of 2019, Citizens had a combined surplus of over $6.3 billion, supporting approximately $102 billion in total insured value, while the entire surplus of the Florida-based domestics was approximately $4.25 billion, supporting just under $1.67 trillion in total insured value.

“The overall reduction in exposure for Citizens, combined with the lack of landfalling hurricanes for a decade, has greatly eased the financial burden on the residual market and the likelihood of assessments from Citizens,” the report states. “However, the continuing shift in policies to the Florida-based domestic insurers with weaker policyholder surplus (PHS) positions has increased market reliance on the FHCF and may have shifted the ultimate risk from an extreme hurricane event to the Florida Insurance Guaranty Association (FIGA).”

Citizens Past Policy Count Reduction Efforts

Much effort was made in reducing Citizens’ policy count starting in 2010 as the insurer approached its peak policy count. FSU noted several of these efforts in the report – the addition of a 30-day timeline on opting out of a takeout offer in 2010; eliminating the withholding of ceding commissions in 2011; enhancing data used by takeout companies to assess policies in 2012; the creating of the Clearinghouse in 2013; and the revision of the Depopulation Committee in 2014.

The FSU study said the insurer has had success with various exposure reduction programs like its takeout initiatives. The ongoing depopulation program “resulted in millions of policies being taken out of Citizens over time.”

Some policies that were taken out by private market insurers ended up returning to Citizens, with most of the returning policies coming from companies that later became insolvent, the report says. Mostly smaller Florida domestics participated in the early years of the takeout program and in the later years it was larger companies as they sought to build their books of business. After 2009, Citizens takeout program became more of a “supplemental source of policies for the companies participating,” the study said.

In recent years fewer policies became available in Citizens for takeout, which limited the option of it being a “significant growth opportunity for insurers.”

Gilway noted at Citizens’ December Board of Governors meeting “depopulation today, given the lack of capacity in the marketplace, has really come to a screeching halt.”

The FSU report’s examination and detailed analysis of the Florida market sought to develop approaches that would “shift the focus to optimal transfer of risk from Citizens to the private market.”

FSU identified three opportunities to accomplish these goals:

• Tail Minimization: Emphasizing reductions of Citizens’ tail loss potential not considering any other constraints such as post-depopulation impacts to the Florida private residential property insurance market.
• Mutual Diversification: Ranking private market participants by their ability to assume policies that are driving Citizens’ tail risk, relying on diversification and establishing a system that results in mutual benefits to both Citizens and the companies identified with high mutual diversification.
• Resilient Depopulation Package: Creating portfolios of Citizens’ policies based on specific optimization criteria that would be attractive to any private insurer and/or capital markets.

FSU also identified approaches that could be taken to reduce Citizens’ actual exposure (not just policy count) such as promoting the private market’s retention of risk depopulated by Citizens and protecting the favorable status of Citizens’ outstanding bonds, among others.

FSU’s overall approach recommended the hosting of workshops that involve a variety of stakeholders to gain a better understanding of their perception of the Florida market “and provide them with the information about the Florida market that would be valuable to potential investors and private market insurers.”

Its 18 other recommendations were organized into the following categories:

• Approach 1: Attracting investors to the Florida market – encourage new entrants to develop business models specifically for the Florida market.
• Approach 2: Increasing the use of loss control by homeowners, i.e., requiring Citizens’ policyholders to engage in loss prevention and loss reduction efforts.
• Approach 3: Reducing system inefficiencies – expand, widely promote managed repair programs; look at different claims settlement processes.
• Approach 4: Increasing the availability of quality data to stakeholders via a statewide database of loss control mitigation features, etc.
• Approach 5: Maintaining the solvency of insurers operating in the Florida market by altering the approach to Citizens’ takeout program; deploy new/emerging methodologies to better evaluate risk; regularly conduct stress testing, etc.
• Approach 6: Improving rating methodologies – make changes to Citizens’ glide path for rate increases; limit Citizens’ policyholder eligibility; update or eliminate mandatory mitigation credits for insurers or encourage private market insurers to establish “proper” discounts; create marketing campaign to educate homeowners.
• Approach 7: Miscellaneous – establish stronger requirements that policies taken out of Citizens be held for 3 years; work to help establish a centralized insurance fraud database; create state-level program to address residential property insurance affordability.

“All 18 of these ideas need to work together,” FSU’s Dr. Charles Nyce, member of the team who worked on the study, said at the Dec. 16 Citizens Board of Governors meeting. “Picking and choosing one approach here and one approach there probably doesn’t get it done. It’s going to take a concise, coordinated effort among all the stakeholders with all of these different approaches coming into play.”

Ultimately, the volatility of Florida’s insurance environment is the biggest hindrance to Citizens, and it is going to take time to enact strategies and see enough of a shift to make a difference to its exposure, the study noted.

“The FSU study has provided welcomed input in efforts to better focus Citizens on its role as the state’s insurer of last resort. The study will no doubt be referenced often as we and other stakeholders deal with the critical issues facing the Florida property insurance market,” a Citizens spokesperson told Insurance Journal.

Read Full Report: Citizens Exposure Reduction & Depopulation Opportunities Analysis – Final Report

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Red tide is back in the waters off of Florida’s southwest coast, making birds sick and killing fish, according to a state environmental agency update on Wednesday.

While satellite imagery isn’t picking up the toxic algal blooms, the Florida Fish and Wildlife Conservation Commission said it’s been detected in the waters between Sanibel Island and Marco Island.

Officials said recent tests that were done on sea birds alerted officials about the bloom.

“Our first indication of this particular event was we had over a dozen cormorants that came into a wildlife rehab center on Sanibel and we tested blood from those cormorants and all of them tested positive for the red tide toxin,” Gil McRae, director of the agency’s Fish and Wildlife Research Institute, told commission members during a virtual meeting.

McRae said it was a late season bloom, and that winter weather could likely break it up, but in the meantime the state, local governments and volunteers are trying to identify what areas are being affected.

“We are ramping up every available resource to respond to this red tide,” McRae said. “As of right now it doesn’t appear to be nearly as large scale as the ones we’ve seen in the recent past.”

The toxic bloom overran Florida’s southern Gulf Coast in 2018, killing huge numbers of fish along with scores of sea turtles and the state’s beloved manatees. The bloom also causes respiratory irritations in people which, coupled with the stench of rotting marine life, sent many tourists fleeing beaches, seaside attractions and nearby restaurants.

Red tide is caused by an organism called Karenia brevis, which occurs naturally in the waters off Florida. In an average year, a red tide may bloom in the fall and run its course through the winter months.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Insurance industry losses from natural catastrophes and man-made disasters across the globe amounted to $83 billion in 2020, making it the fifth-costliest year for the industry since 1970, according to the Swiss Re Institute in its preliminary sigma estimates.

Natural catastrophes caused $76 billion of global insured losses, up 40 percent from 2019, mostly from secondary peril events such as severe convective storms (thunderstorms with tornadoes, floods and hail) and wildfires in the U.S. In addition, manmade insured losses came to $7 billion in 2020, down 17 percent from the previous year.

Secondary perils* accounted for 70 percent of the $76 billion in insured losses from natural catastrophes, said Swiss Re. These secondary peril events are expected to increase as more humid air and rising temperatures create extreme weather conditions, which exacerbate wildfires, storm surges and floods.

The North Atlantic hurricane season was very active with a record 30 named storms, but its insurance price tag of $20 billion was moderate compared to the record seasons of 2005 and 2017, said Swiss Re.

Although five named storms made landfall in the U.S. state of Louisiana alone, a record number, the report noted that most U.S. landfalls did not hit densely populated areas in 2020.

As a result, the insurance industry saw relatively low insured losses of $20 billion, far lower than in the previous record hurricane seasons of 2017 (when Hurricanes Harvey, Irma and Maria had an insured price tag of $97 billion) and 2005 (when Hurricane Katrina cost insurers $87 billion).

The report went on to say that the insurance industry covered 45 percent of 2020’s global economic losses of $187 billion, above the 10-year-average of 37 percent (which indicates a narrowing of the insurance protection gap). (Editor’s note: Economic losses include insured and non-insured damage costs).

“As with COVID-19, climate change will be a huge test of global resilience. Neither pandemics nor climate change are ‘black swan’ events. But while COVID-19 has an expiry date, climate change does not, and failure to ‘green’ the global economic recovery now will increase costs for society in future,” said Jerome Jean Haegeli, Swiss Re Group chief economist, in a statement.

“This year’s natural disasters impacted regions with more insurance cover in place, providing vital support to the people and communities affected and enhancing their financial resilience,” he continued.

Other findings from the report include:

• A record number of severe convective storms hit the U.S., which will likely lead to record annual losses for this peril.
• Australia saw significant losses from hailstorms, including January storms in southeastern Australia, which cost insurers more than $1 billion.
• Canada experienced its costliest-ever hail event in Calgary in June with losses of $1 billion.
• Although less than the record wildfire losses of 2018 and 2017, 2020 will be one of the costliest for the U.S. and Australian fire seasons. (See related article: RMS Says Insured Losses from 2020 Western U.S. Wildfires $7-$13B)
• Secondary perils during 2020 included severe floods in several provinces along the Yangtze River in China from May, causing insured losses of roughly $2 billion.
• Winter storms hit northern Europe in February, causing flooding, power outages and transport disruption, with more than $2 billion in insured losses.
• Cyclone Amphan in the Bay of Bengal in May caused economic losses of $13 billion, the most destructive tropical cyclone India has ever experienced. Insured losses are expected to be just a fraction of the economic losses due to the region’s low insurance penetration.

Swiss Re Institute said it will publish updated 2020 loss figures in a full sigma report in the spring of 2021.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

AM Best has downgraded the Financial Strength Rating (FSR) to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” from “a-” of Tower Hill Prime Insurance Co., headquartered in Gainesville, Fla.

The outlook of the FSR has been revised to stable from negative, while the outlook of the Long-Term ICR is negative

Best said the ratings reflect Tower Hill Prime’s balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).

The rating downgrades reflect significant volatility in underwriting performance that has resulted in operating performance that no longer supports the adequate assessment, Best said. Tower Hill Prime’s underwriting performance has been unfavorably impacted by elevated weather activity and an adverse legal claims environment, as well as adverse loss reserve development due to challenging claims trends. Best noted that while Tower Hill Prime has implemented a number of corrective actions to improve performance such as rate increases, more aggressive agency management, refinement of underwriting schemes and more selective risk criteria, its underwriting performance has not yet stabilized.

The negative outlook on the Long-Term ICR reflects an unfavorable trend in risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as elevated reinsurance dependency and continued adverse loss reserve development. As the overall balance sheet strength is currently assessed at the high end of very strong, continued pressure from the aforementioned factors pressures this position. Elevated reinsurance dependency will continue to challenge the company in the wake of a hardening reinsurance market; however, management intends to reduce exposure and thus reduce the level of necessary reinsurance.

Prior efforts to stabilize loss reverse development have resulted in modest year over year improvement but deficiencies remain, Best said.

Florida Property Insurance Market Inches Closer to Crisis – Part 1

Florida Property Insurance Market Inches Closer to Crisis – Part 2

The business profile assessment of limited reflects Tower Hill Prime’s concentration in Florida, which is a hurricane-prone state. Catastrophe risk management remains a focal point of the company’s ERM program, which is considered appropriate. The ERM program includes comprehensive catastrophe reinsurance coverage, formal documentation of risks, and specific risk appetites and tolerances statements.

Tower Hill Prime Insurance Co. is part of the Tower Hill Group of companies that also include Tower Hill Preferred Insurance Co. and Tower Hill Signature. Effective June 1, 2020, Tower Hill Signature merged with Tower Hill Select and Omega to create one consolidated company, Tower Hill Signature. The group is among the largest residential insurers in Florida with more than 1.7 million policyholders in the state. It has written business in the state since 1972.

Tower Hill is represented by more than 850 insurance agencies, offering personal and commercial lines coverage.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Technology is ever-changing and rapidly evolving, influencing our lives in ways that were previously unimaginable. The car insurance industry is one such area that has witnessed incredible innovation over the last decade. Auto insurance companies have adopted telematics technologies, prompting carriers to offer unique programs that can enable discounts on insurance for drivers based on how they drive.

But what do customers really think of these programs?

Clearsurance, the insurance marketplace that provides individual recommendations built on evaluations of more than 160,000 customer recommendations, independently collected thousands of customer reviews about insurance companies. The reviews were evaluated to better understand what customers think of the telematics programs available today.

Is there even an appetite for telematics-based programs?

First, let’s take a step back to understand more about telematics devices, which can help insurers record, process and analyze information such as driver speed, distances driven, time of day at which you drive, hard/fast braking and whether or not your phone is being used while driving. These telematics devices help you prove to your insurance company that you’re a safe driver. Insurance companies will often provide incentives, such as premium discounts or cash back, just for signing up for these programs, with additional rewards for continued positive behavior behind the wheel.

Clearsurance analyzed more than 160,000 reviews, including a subset of them to assess what customers really think about their driver measurement program. For the most part, customers rate insurers offering telematics devices highly. The average rating for all reviews mentioning telematics is 4.2 out of five possible stars. This indicates that most of the insurance customers who use these devices are pleased with the results.

Customers who praised telematics devices in Clearsurance reviews frequently mentioned their satisfaction with the car insurance discounts and savings they received. For example, in one customer review, a State Farm Drive Safe & Save user said their insurance bill continues to decrease because of savings from the telematics program. In another review, a driver using Nationwide’s SmartRide said they were able to lower their insurance premium by 35% with the program.

More consumers are choosing telematics

Cambridge Mobile Telematics (CMT), the telematics provider, ran several surveys recently focused on U.S. drivers’ appetite for different pricing, services and reward models. A total of 1,000 people were interviewed regarding their perspective on issues such as road safety, distraction and insurance pricing models. From a high-level, the study found:

• 57% liked the idea of proactive and automatic assistance in case of a severe crash;
• 52% would appreciate help with the claims process, leveraging the telematics data generated by their insurer’s program; and
• 48% asked for a certified report in case of a crash that could be used in the claims process.

That’s why CMT decided to use the very device responsible for distracted driving — the smartphone — to provide drivers with real-time feedback based on how they actually drive. This usage-based insurance model helps ensure drivers are priced on more accurate assessments of their driving, rather than outdated models for pricing premiums like credit score and where you live.

What are the benefits to drivers?

Aside from fairness in pricing, telematics technology unlocks the key benefit of assistance in case of crash and claims filing. Telematics has enabled companies such as CMT to provide telematics device-enabled and app-only solutions that are capable of recognizing a crash. Drivers see value in an insurance telematics app that can help them after a crash.

Beyond claims and pricing, some insurers also offer rewards programs. Insurance companies are providing rewards like Amazon gift cards in exchange for safe driving. These programs provide no reduction in premium, but they do provide value to drivers. They also make the roads safer. The programs give drivers feedback and incentives for things like not interacting with your phone while you’re driving.

What can be done next?

Leveraging telematics is one of the many ways that auto insurers can offer discounts. Those savings are based on the risk you represent. Your risk as a driver is based on data collection and assessment. You agree to that when you sign up to use one of the devices or mobile applications.

Not all programs are created equal, so it’s worth your time to do some research and find out what technology and benefits your insurer has available. And as mentioned above, while the majority of telematics programs are highly rated, it’s worth understanding the differences.

Overall, when shopping around for car insurance, telematics programs can save drivers hundreds on insurance. It’s worth considering an auto insurance program that uses your own driving safety to help you save money, become a safer driver and get more value from your insurance policy.