Property owners in Florida get worse news by Mitch E. Perry05/22/06
With the chance of more hurricanes hitting the sunshine state, some of the biggest insurance agents in the country are fleeing from doing business in Florida, or charging a lot more for their coverage.
On Friday, Allstate, the stateâ€™s 2nd largest insurer said it would drop 174,000 policies statewide. A spokeswoman for the company said the transition will take a year, and will NOT start until hurricane season is over.
And State Farm announced it was adding increases of more than 70% for the average homeowner. They also announced that it was canceling about 1500 policies held by condominium complexes.
Geoff Grady is President and CEO of the Florida Insurance Agents Association. He says these increases are an indication of how troubled the market is (roll tape#1 o.q.â€?to keep on comingâ€?)
State Farm also said that it will drop wind coverage for about 39,000 customers in certain coastal parts of the state.
During the Legislative Session that ended earlier this month, state lawmakers approved $715 million in insurance rate relief to Citizens Property Insurance Corporation, the state run insurer of last resort.
Geoff Grady of the Florida Insurance Agents Association says the bailout shows that the state is getting involved with insurance at a much quicker rate than anybody could imagine. But he thinks that the legislature punted when they needed to come up with a comprehensive plan to deal with the growing home insurance crises, fed by the storms of the past 2 years (roll tape#2 o.q.â€?interest on that moneyâ€?)
Nationwide Insurance announced 2 days after Hurricane Katrina hit New Orleans last year that, starting in March of this year, it would not renew approximately 35,000 homeowners and 4800 mobile home policies â€“ as well as approximately 12,000 commercial policies like condominiums, apartments,and rental properties.
But for some property owners, the realization that their insurance company is leaving is just hitting them now.
Joe Case is a spokesman for Nationwide. He acknowledged that some property owners may just be getting news of their policies being dropped (roll tape#1 o.q.â€?alternative coverageâ€?)
the Florida Association of Insurance Agents is reportadley is working on one of the proposals for a new state insurance program. One possibility would be for a state windstorm program to provide coverage for the most severe Category 3, 4 and 5 hurricanes, which could help insurers because they would not face the unpredictability of being wiped out by catastrophic storms.
Democratic lawmakers, meanwhile, have floated a different approach in which a state insurance program would cover most of the first $100,000 in damages that a property sustains in a hurricane.