Just before 1992, home owners and condo owners did not find it very hard to obtain the necessary homeowners insurance at a very affordable premium. It has been a whole different ball game since Hurricane Andrew slammed the coast of Florida in 1992. Since then, finding adequate homeowners insurance coverage in Florida became increasingly harder to do. Now fast forward to 2013, recently the Florida Senate have been voting on profound changes to the Citizens Property Insurance Corporation. It is feared by some experts based in the South Florida that it would harm the recovery of the market.
Apparently, these changes will cause a dramatic reduction on the overall coverage that insurance companies provide that are run by the state of Florida, Citizens Property Insurance. This would mean expensive homes would be excluded from coverage. In addition, the changes made will go on to deny essential coverage in the coastal regions by various construction companies, and that when the construction of Condos are on the rise again.
Lawmakers are quite concerned that Citizens won’t have sufficient surplus funds should a major hurricane take place. Its been said that in the event of a major storm, Citizens are expected to be short by as much as $4.1 billion as per a recent study conducted by Financial Services Commission. This kind of shortfall would then be recovered by excessive surcharges that will be deducted from all insurance policies in the Florida state, and not just from the Citizens policyholders. The aim of the bill currently is to shrink Citizens to allow rates to rise for it to fully cover the possible risk of a major storm. Whether that will happen is another story altogether.
Not too long ago all kinds of legislative efforts to get people away from state run companies met with tough political resistance due to rates that increased to position insurers as less than desirable to work with.
This type of strategy is very unpopular with customers who are with Citizens. You can just imagine how disturbing this would be to the private insurance market as boosting Citizens rates gives private insurers more freedom to increase their premiums.
l The insurance costs of properties in Florida have gone ever higher even though the state of Florida has not experienced any major hurricane storms for seven straight seasons.
l Homeowners insurance takes up at least 4.6 percent of the average household income in Florida. Whereas in 2004, it was only at 2.6 percent. In addition, it clearly outweighs taxation on properties which is a major concern for residents of the state of Florida.
If you are a home owner or Condo owner, you may have some questions or concerns that need answering. You have two options open to you. The Division of Consumer Services has a site available where you could browse through the various Consumer Guides to give you an indication of the kind of coverage you should be looking for while getting a better understanding of the type of property insurance that would best suit your needs. Or, you could follow the easier option which would be to contact your local agent to find alternative property insurance options.