FLORIDA Opinion
by:
E. Eugene Webb PhD
For
an insightful look at the Florida Home Owners Insurance problem check out this Post from the Orlando News 6+ Weekly by Justin
Warmoth: Florida lawmakers set to hold special session on property
insurance.
For
a look at the other side of the issue from the Tampa Bay Times by: Lawrence
Mower Times staff: Florida insurance company execs saw big payouts in years
without hurricanes.
From
the Times article this quote: “In 2015, State Farm’s CEO earned $13.3
million overseeing America’s largest property insurance company.
That
same year at Tampa-based Heritage Insurance Holdings, one of numerous small
Florida-based homeowners insurance companies, its CEO made $27.3 million — despite
overseeing 0.3% of the number of policies and accounts of State Farm.”
You
can see there's a lot of blame to throw around on both sides of the Florida homeowners'
insurance crisis.
As
you look into this issue, you're going to hear a lot of carping from the
insurance industry about the number of lawsuits filed in Florida and the amount
of money that is flowing to law firms for pursuing claim's settlements with homeowners’
insurance companies.
What
is assigned benefits? For some insight from the Florida Office Of Insurance
Regulation: Assignment of Benefits.
What
are some of the political implications for the Florida legislature as it looks
at Florida's homeowners’ insurance regulation?
From
the Tallahassee Democrat by John Kennedy of the capital Bureau of USA TODAY
network - Florida: New-look Florida Legislature tackles old problem — homeowners
insurance.
From
the John Kennedy report: “While little is known about why Florida insurers
become troubled — some analysts say poor investments and bad management are to
blame. Yet the industry blames the cost and financial risk of lawsuits, and
soaring prices for reinsurance — basically, insurance for insurance companies —
for its woes.”
If
you currently have a mortgage on your home, the homeowners' insurance
requirements are generally spelled out as part of the agreement for the mortgage,
and you may have very little opportunity for adjusting those requirements.
If
you not inherently risk averse, that is fearful for financial exposure due to
storms or loss to your property, one of the ways you can manage your homeowners
cost is by adjusting the deductibles.
If
you do not have a mortgage on your home, then there may be a number of
additional options for you regarding what insurance coverage you actually
purchase.
Also,
always remember the insurance agent is compensated on commission so the higher
the premium the more he/she makes.
For
example, while living in Pinellas County well back from the coast, I carried
only fire and liability insurance on my home. No wind, no flood.
Now,
I don't recommend this approach at all. However, when everyone around me was
paying upwards of $4000 a year for homeowners’ insurance, my homeowner's
insurance for over 10 years was less than $1000 annually. I banked a significant portion of the savings in an investment account and gradually built up an emergency fund. Interestingly I never had to use it
Granted
it's a heavy risk, You can bear grave consequences if you suffer a major wind
or water-related loss. However, it is an example of how you can mitigate your homeowner’s
insurance cost if you are willing to manage and assume the expense of the risk
for the long term. Check with your insurance agent.
The
politicians have a lot to mull over and chew on during this special session. Not
only the number of failing homeowners’ insurance companies in Florida and the
number leaving, the almost certain increase in all insurance rates especially
those for people insured with the states' citizens insurance provider; but also,
the political ramifications of an insurance industry being upset with
individual or specific legislators given the upcoming election.
So,
keep an eye on Tallahassee this week. It will probably look like a cross
between a 3-ring circus and a food fight.
E-mail
Doc at mail to: dr.gwebb@yahoo.com or send me a Facebook (E. Eugene Webb) Friend
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BAY.
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Doc's Photo Gallery at Bay Post
Photos.
Disclosures:
