Donna Bavier, Brightway Insurance
Q. Why do rates/premiums keep increasing?
A. Rates keep going up with all Florida Insurers (carriers) and we are asked often lately...WHY? There are no hurricanes, market values are down and they haven’t had any claims!
Insurers have a significant cost to operate their business and to be able to provide services to clients in the event of a claim.
They need to make sure they have enough surplus money to pay claims investing wisely but conservatively and we know how difficult that is these days.
The cost of reinsurance is increasing, this is insurance for insurance companies and these companies are successful insurers located all over the world. They spread their risk globally and pay claims for all types of weather catastrophes. These rates have also increased due to the world having had its worst year on record for weather.
Yes…the value of homes has decreased but the cost to repair or rebuild has not.
Q. What about flood insurance?
A. www.floodsmart.gov is a great site to learn all you need to know about flood insurance. Flood Insurance is attained through a Federal program called the “National Flood Insurance Program” with FEMA’s direction. Rates for flood insurance are also on the rise as the program was recently authorized for a 5 year extension and the increase in premiums was part of the compromise. No matter whether or not you are in a flood plain you should protect yourself with a flood policy. In Florida, we are surrounded by water, susceptible to storms and the water level is high under the ground.
Q. What about Citizens?
A. The Citizens Property Insurance Corporation is the state insurer that was created years ago as “the insurer of last resort” so if you had a home that could not be insured in the private market then you could get an insurance policy with Citizens. The problem is, due to all of the high risks they have attained, they have paid out more in the way of claims than what they have in surplus. They have since ratcheted down the underwriting so they no longer accept all homes that are “uninsurable”… or are very strict with what they will accept. The rates have increased quite a bit over the years. Every person in Florida that has a home insurance policypays a small percent of that policy to help fund Citizens.
Q. What are the types of policies?
A. There are different policies for a single family home, a condo, and a tenant occupied home. You want to be sure you have the correct type of policy. For instance a condo, as long as it has a Master Association Policy, would be insured differently than a townhome or a single family home.
Q. What are some of the most important factors when trying to get a home insurance policy?
A. The homes built after 2002 (that is when the building codes changed) are easy to insure. It is the older and coastal ones that are more challenging.
There are a number of things that are very difficult if not impossible to insure like a home that has a Federal Pacific Electrical Panel, synthetic stucco, an attack breed dog, a trampoline, aluminum wiring, polybutyleneplumbing, etc. It is important to know about the home you are trying to buy or sell so you know what insurance will be like for that home and or a client.
You may want to consider getting a Wind Mitigation Inspection Report for homes older than 2002 as there may be additional discounts available.
As more carriers shut down in zip codes where they are at capacity, the beach especially … it is important to know that if you are told you can’t get insurance or it is more costly than you think it should be, to try another agent as not all agents have the ability to write with all carriers. Someone that can check the entire market to find the best combination of coverage, quality of the company and, of course, price.