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Property Insurance HB 1307 cleared its final committee stop this week, proposing changes to the operations the state-run property insurer, Citizens Property Insurance Corporation. Under current law, Citizens will only cover new homeowner policies if other policies are more than 20 percent higher than the premium it would charge for comparable coverage from the corporation. Citizens will not underwrite renewal policies if another insurer’s premium is equal to or less than what the corporation would charge. Beginning in 2023, the bill proposes that Citizens would no longer cover renewal policies unless an outside insurer’s premium is higher than what the corporation would offer by a specific percentage: 4% for policies that renew during 2023; 8% percent for policies that renew during 2024; 12% for policies that renew during 2025; 16% for polices that renew during 2026; and 20% for policies that renew during 2027 and beyond. SB 1728 is being heard in its last committee stop on Monday. To read more, click HERE.
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The Florida House of Representatives’ Commerce Committee passed no fewer than five bills Wednesday that could affect property and casualty insurance, from allowing surplus lines carriers to be based in Florida, to encouraging more take-outs of Citizens Property Insurance policies.
House Bill 951 would, for the first time, allow Florida-based surplus lines insurers to sell surplus policies in Florida. A similar bill has met with little opposition in the Senate, but HB 951 ran into some unexpected criticism in the House committee.
The bill’s sponsor, Rep. Tommy Gregory, R-Bradenton, and other supporters have said the measure would help Florida’s increasingly distressed property insurance market by giving commercial property owners and homeowners more companies to choose from. But Hillary Cassel, an attorney with the Florida Policyholders Cooperative, pointed out that because surplus lines are not subject to the same Florida regulations as domestic P/C carriers are, many of them require policyholders to settle disputes through arbitration in out-of-state venues.
Rep. Gregory
“This is going to provide an avenue for carriers in the state to open up a separate book of business, which is great, considering the state of the marketplace,” Cassel said. “But we want to make sure that there are some additional consumer protections so that homeowners and business owners in this state aren’t forced to resolve a dispute out of the state of Florida and allow other states’ laws to apply.”
Rep. Michael Grieco, D-Miami, agreed, quoting social media memes about other issues. “I don’t know why we would want to ‘New York our Florida,’” he said.
Rep. Charles Clemons, R-Cross City, said that in light of the insurance crisis in the state, most policyholders would understand the caveats, especially since some people may not be able to find insurance otherwise.
The committee voted overwhelmingly to approve the bill.
HB 1307, also by Rep. Gregory, would make a number of changes to the way Citizens, the state-backed insurer of last resort, does business. For starters, the bill would make Citizens policyholders ineligible for renewal if other insurers offered premiums that are only slightly higher – starting at 5% higher in 2023 and climbing to 20% by 2026.
The original bill would have stiffened the requirements that Citizens officers and board members have insurance industry experience, but that was removed in an amendment to the bill Wednesday.
HB 1307 also would require state regulators to approve the method Citizens uses to value dwelling replacement costs; would increase a surcharge placed on policies as the number of policies grows. The number of Citizens policyholders is on track to top 1 million by year’s end, as other insurers withdraw from the market and Citizens’ premiums remain lower than other carriers in many cases. That puts taxpayers at risk if major disasters hit the state.
Lawmakers and others have advocated for ways to reduce the corporation’s exposure. The surcharge would help discourage policyholders by increasing to 25% of the premium if Citizens reaches 1.5 million policyholders, according to the bill.
Gregory warned that without the changes, Citizens could soon become the insurer, not of last resort, but of “only” resort for most Floridians.
HB 749, by Clemons, would increase penalties for unlicensed public adjusters who violate the law; would require home and auto warranty firms to provide their full business name and license number; will allow digital driver licenses and will require that electronic driver information include insurance coverage info; and would notify drivers of lapses in coverage.
The bill also would let the Department of Financial Services fine insurers up to $2,000 per day if they fail to comply with investigations of insurance fraud.
Florida’s chief financial officer, Jimmy Patronis, applauded the passage of the bill, which now goes to the House floor.
HB 503, also by Gregory, would make changes to a number of programs. These include modifications to when a collateral-protection insurance policy is eligible for Florida Hurricane Catastrophe Fund coverage; allows Citizens to insure some condominiums through commercial wind-only policies; and allows smaller construction companies to avoid annual audits by workers’ compensation insurers.
HB 837 would divert some money from the catastrophe fund to be used for hurricane preparedness, home wind-mitigation improvements, shelter construction and other projects.
The committee approval means that most of the bills will now head to the House floor for a vote. Similar bills are making their way through Senate committees. Lawmakers have until March 11, the last day of the 2022 session.
Rabb is Southeast Editor for Insurance Journal. He is a long-time newspaper man in the Deep South; also covered workers’ comp insurance issues for a trade publication for a few years.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. 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
A Florida Senate committee wasted little time Wednesday in approving a bill that would require more frequent inspections of condominiums statewide – one of the first pieces of legislation to come out of the rubble of the collapsed Champlain Towers South condo.
By a vote of 17-0, the Senate Rules Committee endorsed Senate Bill 1702, which would mandate that multifamily buildings of three stories or more undergo engineering inspections after 30 years and every 10 years thereafter. Within three miles of the coastline, condo buildings would have to be inspected 20 years after construction and every 7 years after that.
Parts of South Florida already require inspections every 40 years, but other parts of the state have no such requirements.
The bill, sponsored by state Sen. Jennifer Bradley, R-Orange Park, would also require condo associations to maintain their properties, make needed repairs and to regularly assess reserve funding available for upgrades.
The measure also would authorize condo association boards to assess owners or to borrow money without owners voting on the moves, something advocates have said is crucial to maintaining condo safety.
Sen. Bradley
Critics have said high-rise condos throughout Florida have had needed repairs postponed because individual owners have been able to veto expenditures. The Champlain Towers building that collapsed last summer in the Miami Beach area, killing 98 people, needed extensive repairs and was in the midst of a long-overdue upgrade, residents have said. Investigations and lawsuits are still underway.
SB 1702 also would make inspection reports more available and part of associations official records.
At Wednesday’s committee meeting, state Sen. Jeff Brandes, R-St. Petersburg, urged colleagues to keep in mind that too many inspections could make it more difficult for condo owners and associations to obtain insurance on the properties.
“These places can be inspected to death,” Brandes said. “If an insurance carrier says it needs to be inspected every five years, that could go on and on. Insurers have skin in the game.”
Sen. Ileana Garcia, R-Miami, worried that “knee-jerk” inspection requirements and insurance restrictions could make it more difficult for some people to find living space or to afford condos in a housing market that is growing more expensive by the week.
Bradley, the bill’s sponsor, responded.
“We are so far from condos being over-inspected right now,” she said. “This bill takes a good step forward with transparency and needed inspections.”
The bill passed two other Senate committees earlier in the legislative session and it now goes to the full Senate. Similar inspection bills are pending in House committees.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. 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
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. 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
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. 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
Unlike whole life insurance, term life insurance is for a specified period, such as five, 10, 20, or 30 years. At the end of the term, the life policy expires, and you won’t receive a refund for your premiums unless you’ve opted for a return of premium life insurance.
If you still need life insurance at the end of the term, you can get the policy renewed or go for a new policy. To renew an old policy, you’ll likely pay more than you first did because you’ve aged since you started the policy and might not be in the same health situation.
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What term life insurance is the best?
When choosing a term life insurance policy, it’s better to go with those that are reputable, have strong financial ratings, and have stood the test of time. Investopedia has ranked the following as some of the best:
Best overall: Haven Life Insurance.
Best for return of premiums: State Farm.
Best for decreasing term: Protective Life Insurance.
Best for company longevity: New York Life.
Best for customer satisfaction: Northwestern Mutual.
Best one-stop shop for insurance: Guardian Life.
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Does term life insurance have cash value?
Term life insurance policies don’t typically offer cash-value benefits. Permanent or whole life insurance policies, on the other hand, offer both death benefits and cash value.
Can term life insurance be cashed out?
”Cashing out” means accessing the accumulated cash value of the policy before the death of the policyholder. Since term life insurance policies don’t have a cash-value component, it’s not possible to cash them out. However, some give policyholders the option to convert term life into permanent life insurance for an added cost.
Why Dave Ramsey recommends having term life insurance
According to U.S. radio host, financial expert, and national bestselling author Dave Ramsey, if you depend on your income right now, you need term life insurance. The generally recommended amount is equal to 10–12 times your annual income on a 15- or 20-year guaranteed level term plan. He recommends going for “A” rated companies.
Moreover, between term and whole life insurance, he believes the former offers much better value for your money. Whereas whole or universal life insurance policies let you invest part of the money paid, their premiums are much higher. Also, their returns are lower than for other investments such as IRAs.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. 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
Life insurance is something just about everyone should have at some point in their life, but it might be tough to decide the best time to buy it. Should you buy life insurance in your 20s or wait until you’re older? There are a few compelling reasons for buying life insurance at a young age, but you should consider various options.
The general purpose of a life insurance policy is to provide financial support to loved ones after the policyholder dies. The beneficiaries receive a death benefit to help cover the loss of the deceased person’s income, pay off a mortgage, raise children, or cover any other financial obligations.
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Why is it a good idea to buy life insurance in your 20s?
Life insurance, when purchased at a young age, can benefit you significantly over your lifetime. According to Investopedia, some of the key benefits include:
You can get lower premiums when you’re younger.
You’re usually in better health when you’re younger, which reduces premiums and ensures that you can get coverage.
A death benefit would help your family.
As Fidelity Life explains, buying life insurance in your 20s virtually guarantees the lowest possible rates you’ll get in adulthood. The cost of a policy is minimal. If you plan on having children or dependents eventually, a 20-year term policy can ensure that you’re covered when you need it.
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Second, life insurance companies prefer to cover healthy individuals. The younger you are, the less likely you are to have medical conditions that might keep you from getting coverage later on. Lock in life insurance coverage in your 20s so that if in your 30s or 40s you learn something negative about your health, you won’t be out of luck.
Third, if you change jobs, you’ll lose any employer-sponsored insurance coverage. So, buying your own policy now ensures protection no matter how your career changes.
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If you have debts that won’t go away after your death, buying life insurance right away is wise. While student loans are usually discharged after death, loved ones might still be left with a tax bill. Mortgages will remain for loved ones to pay or deal with as well as final expenses, so even a modest death benefit in your 20s is useful.
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Should you buy term or whole life insurance?
In your 20s, term life insurance is usually your best bet. Even though it isn’t expensive and you can lock in low premiums for many years, you get coverage for unexpected events. Whole life insurance, which offers a cash value and death benefits, can be worth it in a few cases, but it’s usually only for people who have maxed out retirement plans like 401(k)s and IRAs.
When doesn’t it make sense to get life insurance in your 20s?
In a few circumstances, it’s fine to hold off on life insurance. If you have no dependents (people who rely on you financially) and you don’t have any debts that will last beyond death, you might wait on life insurance. If you’re living paycheck to paycheck, that’s another reason to delay coverage, but try not to wait forever.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. 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
The panel also approved SB 186, by Sen. Jeff Brandes, R-St. Petersburg, which could help stem the rapid growth of Citizens Property Insurance Corp., Florida’s state-backed insurer of last resort. The bill would make it harder for seasonal Florida residents, or those with second homes in the state, to qualify for continued Citizens’ coverage if another insurer will write the property at slightly higher or moderately higher premiums.
Sen. Brodeur
The bills are seen as a follow-ups to reform legislation passed in the last three years. If signed into law, the changes would not come a moment too soon, supporters said.
“We are at a crisis point. Now it’s almost whatever is worse than a crisis,” Boyd, an insurance agency owner, said in the meeting.
Brandes pointed out that six insurance carriers in the last few months have stopped writing or will non-renew homeowner policies in the state, and many more have cut back on the locales where they will write and on the types of homes and roofs they will underwrite. Several insurers have asked for steep rate increases this year.
Florida statutes once allowed insurers to write policies that covered only the current value of a roof. Returning to that standard has been discussed in recent years but only seemed to gain traction in recent weeks, as premiums have risen and insurers have recorded significant losses in the state.
By requiring full replacement value on roofs, thousands of homeowners, encouraged by unscrupulous roofing contractors, have filed inappropriate wind-damage claims for 25-year-old roofs that have little more than wear and tear, supporters of SB 1728 said. Insurance policies have become de facto home warranties, senators said.
“Owning an asset requires maintenance. If you drive 85,000 miles on your tires and you need new tires, you don’t make an insurance claim, you just buy new tires,” said Sen. Jason Brodeur, R-Lake Mary. “After 3,000 to 5,000 miles you need your oil changed. But you don’t make an insurance claim.”
Attorney Will Hazelton, of Tallahassee, who represents homeowners in claims disputes, urged lawmakers to vote against the bill. Many low-income people won’t be able to afford to make major repairs to their roofs, above what an insurance payment will cover, he said.
“What I’m concerned with is that they will reach out to one of those shyster contractors and have a partial roof repair done and it’s a repair that will not stand up to scrutiny, if they later have damage to their house, under their policy provisions,” Hazelton said.
He warned that instead of making repairs or replacing roofs, many homeowners will resort to simply putting a tarpaulin over the house and leaving it there for years.
Boyd said his bill provides an exception for roofs damaged during a named hurricane. Those claims would, in most cases, continue to qualify for full replacement. Some insurance industry advocates have warned that such a provision will not significantly reduce overall claims costs because so many named hurricanes are likely to hit Florida in coming years.
Boyd also noted that without legislative action, homeowner insurance premiums will continue to rise, making insurance and homes unaffordable for many low-income residents.
SB 1728 and SB 186 were both approved by the Senate Banking and Insurance Committee earlier this month. The next stop is the full Senate Appropriations Committee. If passed there, the bills will move to the House. The session is scheduled to end March 11.
The subcommittee on Wednesday also passed SB 1430, by Sen. Danny Burgess, R-Zephyrhills. The bill would make a number of technical changes to insurer insolvency rules, including allowing insurers to make advance assessment payments to the Florida Insurance Guaranty Association in quarterly installments.
It also would require that the workers’ compensation rate-making organization for Florida, the National Council on Compensation Insurance, to include insolvent comp insurers’ loss experience data when recommending rates. It would also allow officers and directors of insolvent insurance companies to later be named officers or board members of other insurers, unless the Florida Office of Insurance Regulation finds that they had contributed to or caused the insolvency.
SB 1476, by Sen. Tom Wright, R-Port Orange, would authorize the Office of Insurance Regulation to examine pharmacy benefits managers, and would penalize PBMs that fail to register with the state. Pharmacy groups have supported the measure, and the subcommittee approved it Wednesday.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. 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 House Committee Approves Home Hardening Tax Breaks
Florida’s chief financial officer is applauding lawmakers for approving a home-hardening measure that could affect homeowners insurance rates in years to come.
“Since last year, we’ve been pushing hard on the idea of helping homeowners better fortify their homes from storms with our ‘Home Hardening’ initiative,” CFO Jimmy Patronis said in a statement. “This is a practical way of saving folks money while incentivizing homeowners to better protect their homes from hurricanes.”
The Florida House Ways and Means Committee this week passed a tax package that includes sales tax incentives for homeowners who install impact-resistant windows, doors, garage doors and roof tie-downs. In many cases, the homeowners will also receive credits on their home insurance premiums.
Patronis also supported the passage of Senate Bill 1054 by the Senate Rules Committee. The bill, if signed into law, would require schools to teach financial literacy to high school students, including the basics of insurance, money management, credit scores, loan applications and related matters.
That bill was approved by the Senate Education Committee earlier this month. A House subcommittee passed a similar bill today, Feb. 16.
Please call Lee from USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. 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
Another one of the top 10 largest insurers in Florida has stopped writing new policies in the state, marking the fifth carrier this year to pull back from the turbulent Florida waters.
“At this time, St. Johns Insurance has made the difficult decision to suspend all new business writing statewide as of Feb. 15, 2022,” the company said in a bulletin sent to its agents.
The St. Johns closure applies to all lines of business. Any outstanding quotes must be bound in the system by 6 p.m. today, the bulletin noted.
The Orlando-based St. Johns is listed as the eighth-largest homeowners carrier in Florida, with more than 160,000 policies, according to a list maintained by the Florida Association of Public Insurance Adjusters.
The news about struggling insurance carriers in Florida has become almost routine. In the past three months, some of the best-known insurers have said they will stop writing new homeowner policies or won’t renew thousands. These include United Property & Casualty, TypTap, Florida Farm Bureau, and Progressive.
St. Johns executives could not be reached for comment Tuesday. The one-page bulletin briefly explains that the suspension is one of several actions the company has taken recently.
“In an effort to maintain balance within our portfolio, we have been employing many strategies to manage our risks: non-renewals, new business eligibility rules, rate changes, overall exposures in territories and portfolio performance,” the bulletin reads. “Sometimes, adjustments may be needed in order to adapt to the ever-changing marketplace.”
Florida agents that sell St. Johns’ policies said that the announcement did not come as a surprise in a state that has been squeezed by storm losses, spiraling claims litigation costs, and higher reinsurance prices.
“St. Johns has been pulling back for a while and increasing premiums, pushing people away,” said Chris Coulter, a managing agent in Orlando associated with the Robert O’Neil Insurance agency.
While an almost-unprecedented number of companies have pulled back from the Florida market in recent months, other carriers can still be found to write homeowners insurance, Coulter said.
“It all depends on what part of the state you’re in,” he said.
Policyholders are taking notice, though, especially with spikes in premiums this year.
“Everyone is seeing rate increases, especially when they get that letter in the mail that they have an escrow shortage,” said Bryan Madril, owner of the Madril Agency in Pensacola, which has sold St. Johns policies for a number of years.
The loss of St. Johns is not a major blow to Madril’s business, but it will force agents to scramble to find new carriers for homeowners.
“They were a good fit for us,” Madril said. “We’ll have to look for alternative markets.”
St. Johns is a privately held company that was established in 2003. It is owned by the St. Johns Holding Co. and the majority shareholder is St. James Insurance Group, a managing general agency, according to the company website.
Jesse Schalk is president and Jonathan Mertz is chief operating officer.
A company balance sheet shows that as of December 31, 2020, the company had $153 million in assets and $106 million in liabilities, along with $46 million in surplus.
Last week, the company asked for a use-and-file rate increase of 12% on HO-3 policies and a 15% increase in condo or HO-6 policies, for a total of 169,335 policies in the state. St. Johns also asked for a 14.9% increase on dwelling fire policies. That followed an 8.8% increase for some base rates, filed in September, according to an explanatory memo filed with the Florida Office of Insurance Regulation.
Insurance industry advocates have said the rate increases and writing suspensions show that the Florida market is in crisis, affecting homeowners and the real estate market in the state. They have pinned their hopes on more legislation that they hope will curb claims litigation and roof-replacement costs, among other changes.
The most comprehensive measure, Senate Bill 1728, by Sen. Jim Boyd, passed the Senate Banking and Insurance Committee earlier this month and is on the agenda for Wednesday’s meeting of a Senate Appropriations Committee subcommittee.
Rabb is Southeast Editor for Insurance Journal. He is a long-time newspaper man in the Deep South; also covered workers’ comp insurance issues for a trade publication for a few years.
The Home Insurance Guru 