Posted on 02/03/2006 7:30:39 AM PST by doc30
CLEARWATER - Policyholders covered by Citizens Property Insurance Corp. pleaded with state regulators Thursday night to reject the company's proposed rate increase, saying it will force them to sell their homes.
"I'm sick to my stomach," Pasco County resident Meghan Hulbert told officials of the state Office of Insurance Regulation at a public hearing on the rate increase. "I'm a single mom, and I may have to give up my home."
Officials of Citizens, the state's insurer of last resort, said they are concerned about the rising rates. But they said it was a reality that Florida residents may have to get used to as hurricane and sinkhole claims cause the company to pay out more than it takes in.
Suzanne Murphy, Citizens' chief legal counsel, said the days when Florida was an inexpensive place to live are gone. She said less expensive homeowner insurance rates and taxes will not be coming back.
Hulbert and others among the 85 people who attended said higher rates would force them to sell their homes and leave Florida.
Hulbert said her annual rate for her Trinity home had gone from $800 to more than $3,000 in a little more than two years. Citizens is proposing another 52 percent rate increase for her area.
In other parts of Pasco, Citizens has proposed a more than 100 percent increase. Citizens also wants to increase rates up to 48 percent in Pinellas County and 24 percent in Hillsborough County.
Lee Roddenberry, the state insurance official who will direct the review of the proposal, said he was sympathetic to residents' concerns, but he made no promises of relief. He said regulators would take at least two months to make a decision on the increase.
Murphy said Citizens needs adequate rates.
"For every dollar we take in premium in Pasco County, we pay out $1.50 in claims," she said.
State Sen. Fasano, R-New Port Richey, asked insurance regulators to delay a decision until the end of the legislative session in May. He said the Legislature is ready to make major insurance reforms, including tightening restrictions on filing sinkholes claims. Those claims are the main reason for Pasco's high rates, Murphy said.
Insurance regulators thanked Fasano for his testimony but made no promises.
Consumers at the hearing said insurance regulators need to do something to bring private companies back into the market. Some people said they had talked to insurance agent after insurance agent only to be told their only option was Citizens.
Hulbert, who works as an insurance agent and sells Citizens insurance, said she sadly fields dozens of calls every week from others in the same situation as herself.
"People don't know what to do," she said.
THe reason I'm posting is just to see what others in FL are experiencing and if selling their homes may become a necessity. Personally, I just can't see how the FL job market can provide adequate income for people to afford to live in this state. It was once an inexpansive place to live, but it seems like buying a home here now is like buying one in California.
buying a home here now is like buying one in California
or n.j.....
That's OK. They can make it up in volume.
(Yes, for all you folks in Broward County, I am KIDDING.)
Hmm....that does sound like costly insurance, to be sure. But, you live in an area that's at high risk for damage from hurricanes, right?
The insurance company must collect premiums based on risk. Or do you believe that I should pay for your risk, even though I live in a place where there are no hurricanes?
It's a tough deal for you. I'd consider selling and moving.
I often wonder if they do things like this to drive the homeowners off the land. What is going on in the community with projects, etc?
Yeah, welcome to the "Plywood State."
Here is a link to another article that I just found on this subject.
http://www.sun-sentinel.com/news/local/southflorida/sfl-ztaskforce31jan31,0,6186096.story?coll=sfla-home-headlines
This line is the moste interesting: "Cutting the number of homes it insures for more than $1 million would help, said Susanne Murphy, Citizens' corporate counsel. The company has more than 6,000 homes insured for more than $1 million, and shifting those policies to private insurers would reduce Citizens' exposure by $900 million, Murphy said."
The article talks about capping insurnance coverage on coastal homes worth over $1 million. Based on past losses, such caps would almost eliminate the deficit in the system and allow the average homeowner to purchase insurance. If someone can afford a $1 million home on the beach, I personally don't see why I need to subsidize their insurance coverage by a 100% rate increase I can't afford.
I sympathyze with the people who are suffering as a result of the natural disasters that have destroyed many homes in Florida.
However, insurers cannot just simply keep charging less than they make.
These increases wouldn't be so large if insurers charged more regularly and put more money aside for widespread claims, however the government has kept them from doing so and has put caps on their insurance rates in the past.
This means that since there has been widspread claims, and the insurance company is losing money, they have to have huge premium increases to cover their costs.
It's a bad situation for everyone.
I wonder how long it will be before the insurance companies bring some form of ground penetrating radar to people's homes in areas that are at risk of sinkholes and check for them before they agree to insure them.
See my post #8. It also turns out that a good chunk of the deficit from Citizens comes from covering losses on million dollar beach homes. A cap on coverage for these homes would stablize coverage in this state for the average homeowner.
I'm not worrying about moving, yet. I can handle it. But there are many long term residents here who just don't have the income to pay for it. Median houshold income is around $35K and $4K per year for a modest 2/1 is simply not affordable. It looks like this year is the tipping point for many homeonwers. The problem is that even rental rate will likely go up to cover this so there is no choice by to leave the state if you can. I just wonder where the money is coming from for people moving into this state. FL is one of the fastest growing states and I can't imagine where these people are getting incomes sufficeint to afford homes here. My monthly insurance payments plus my property taxes are greater than my mortgage payment!
the insurance line is bogus.
all policies have, in addition to the deductable, an additional 5% of the home's value that is not covered.
Supposing that you have a 200k home with a standard deductable of 2k, then that is $12,000 not covered for hurricane damage.
And they are going to raise THAT to 10%, = 26k.
FEMA will pay for hurricane damage anyway, and the only things needed are the typical loss patterns of any home.
Citizens should be run out of this state.
If anyone in Florida wants a beachfront home, or a home in a storm surge area, they need to pay for a design that will stand up to the storms we have EVERY year.
If citizens is paying out to "rebuild" homes, then the new build must be storm proof.
Sinkholes, too...read where Citizens has had to shell out almost $100 million since 2002 for sinkhole damages.
"See my post #8. It also turns out that a good chunk of the deficit from Citizens comes from covering losses on million dollar beach homes. A cap on coverage for these homes would stablize coverage in this state for the average homeowner.
"
I saw that, thanks. In any case, it sounds like the homes in your area are subject to some pretty serious risks. Insurance companies have to stay in business. It's unfortunate, but if I lived there, I'd be making moving plans.
"Sinkholes, too...read where Citizens has had to shell out almost $100 million since 2002 for sinkhole damages."
OK. Well someone has to pay for those risks. I'm of the belief it should be the people who live in such high-risk areas.
Actually it had break-away components like stairs which probably ended up smashing into someone else's house further inland.
I'm in Pinellas and our taxes are capped to a certain percentage a year, due to "save our homes."
But I don't know how new homeowners break into the market. We bought our home 17 years ago, for a song, but we could never afford to sell and buy again. The new taxes assessed on us would be higher/per month than our mortgage ever was. (we added on a few years ago when we thought we needed more space, rather than selling and buying.)
My insurance rates have almost tripled, but we are still insured under State Farm, and because we don't have a mortgage we're able to handle the insurance.
But if you're new in the market, have the high cost of the house, high cost of insurance, and high taxes to boot, I don't know how the "average family" will afford it.
Yet, the houses in our neighborhood sell like hotcakes, and the downtown property is bringing in big bucks, so who knows. Somebody must have enough money to buy into this real estate market, I just don't know who it is that's scooping up the real estate, and how the average Joe is affording it.
"It was once an inexpensive place to live..."
We moved in Clearwater in the mid-80's, and I thought it was expensive then. We had to pay more for less house, had to pay large deposits on all utilities (not refundable for two years) and generally, had to pay more for everything. When I looked for a job, I couldn't believe how low the wages were. I don't understand the lure of living in Florida (except for the warm weather). We were glad to move back up north after two years -- winters and all!
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