Property Insurers Seek Hefty Rate Hikes

The best advice I can give you guys is get a Wind Mitigation and 4pt Inspection (combined they should be $150 - $300) and then go shopping for insurance.

The 4pt inspection (roof, electrical, plumbing and A/C) is for homes 20 years or older to make them eligible for insurance and is good for 1 year.

The Wind Mitigation Inspection gets you the credits that will save you money on your insurance and is good for 5yrs.

I cant tell you how many clients just need a revised inspection or are a shutter away from saving thousands every year.

 

I am learning a lot but I'm also far more confused. I saw about the twin causes of roofing litigation and potential risk exposure, and I wrongly presumed that the roof litigation was a very small element of increasing property insurance costs. Looks like it plays a far more significant role.


But if that's the case, I'm not sure why the issue has stymied the legislature. They certainly know how to limit litigation; that's something that can be done through legislation in a variety of ways, often used in combination. And you wouldn't think the current legislature would be worried about upsetting the plaintiff's bar.


One of the reasons I assumed it was primarily windstorm risk is because that issue is almost impossible to solve in a manner that is both economically rational and politically possible. If it is the case that a rational insurer/reinsurer, making a fair estimate of future risk, would want to increase annual property insurance rates by 50 or 60%, maybe more, and you know the public would revolt at such increases, that's a hard problem to solve for a democratically elected legislature. You almost have to have the state underwrite a substantial portion of the risk, which of course we've been doing in one form or the other since the 90s. You effectively increase the subsidy while pretending you're doing something different, because no one really likes that. No one wants to be associated with that bill; everyone wants the less painful fix where there are no significant premium increases with a robust market of insurers seeking your business.


Just not sure why they're not trying to solve it if it's mainly roofing litigation. There are tools in the legislative toolbox for that problem. It may take a few tries to get them honed in the right combination, but there are tools.

 

My son recently bought a house and had to go through this. What a pain. We had to replace the water heater and a electrician friend had to make changes to the electrical panel to addressed grounds not on their own grounding block.

I dread this when/if I sell my house, I will have the roof replaced by then, but I don't have rafter straps, my electrical box is 58 year old with 3 sub-panels, and I'm using 58 year old septic tanks.

 

They really should just create a state wind risk pool like Texas (so private insurers don't have to cover that), and it would solve a lot of the problems in the market.

 

from what i hear from some insurance companies is what's going to happen in the end, non-named storm roof claims will be paid out on an actual cash value, meaning they will only pay for the depreciated cost of your roof, just like they do with your car insurance.

When you wreck your car you get the cars value at the time of the accident, not a brand new car (unless its within 2 years of the model year typically).

 

I'll look into that, thank you...

 

You may have to hold the loan if you can do without the equity up front.

 

Can anybody qualify for Citizens? I have paid over $100k in insurance, been thru multiple hurricanes including Irma eye going over us, have never filed a claim. Seems like a good driver or similar reduction would be warranted

 

Check your local fema map versus your finish floor elevation on your survey. Some counties have a portal where u can enter your address to get your FEMA elevation. If habital parts of structure are and the ground touching the structure are above the fema elevation you can apply for a LOMR to get out of flood insurance.

Letters of Map Revision and Conditional Letters of Map Revision

It would be another thread but as a civil PE I have no confidence in the flood modeling FEMA does. Their inputs and assumptions are beyond conservative and the surges they model never develop when the storms come

 

They can be a problem if the ground becomes too saturated. We lost two big ones that way at Mom's old place in Sparr

 

Roof replacement claims and litigation fees need to be addressed by the boys in tally asap. Good luck with that tho.

Legal fees are out of control, but we wouldn't be here in the first place if insurance companies paid their claims in a timely fashion.
I speak from experience. If we ever have to file a property claim again my attorney friend will be on speed dial. I won't waste my time dealing with the insurance companies delaying tactics.

 

Check out this article from The Ledger:

As hurricane season nears, Florida lawmakers wrestle with battered property insurance market in special session

Florida homeowners likely to keep paying more for property insurance

 

Citizens will pretty much take anyone...if there are 3 or more non weather related claims (busted water pipe, theft, fire, etc) in a 5 year period they more than likely wont take you.

If you have any hazards listed on your 4pt inspection,(most common are double taps in electrical box, water heater has leaks or corrosion, existing roof damage) you wont be accepted until they are fixed.

 

so if Citizens is much cheaper than others and is open to those without recent or obvious structural or mechanical problems, why isn't everybody using citizens?

 

Property insurers "seek" hefty rate hikes? Yeah, they're already here. I got suckered by Avatar a few years back. Left FedNat, where I was paying $6k/yr to take an attractive quote at $4200/yr. Last summer, I got the "we're not going to renew you" letter, despite having zero claims filed - Avatar was in trouble and has since folded. Well, going back our insurance broker, basically nobody wanted to write us a policy. Or they would write a policy, but with limited coverage like $10k max for a water leak. No thanks. We ended up back with FedNat - only they wouldn't write the policy unless we paid a higher premium for a $1k deductible. And it's $12k/year. I've had the 4pt inspection, my roof is 4 years old, I have 100% impact windows. It's incredibly frustrating - all I need/want is catastrophic coverage. If a hurricane does significant damage, or a fire, etc. I'm not filing a claim if I have a minor issue. Heck, I had an issue a couple of years back - AC pan backed up, overflowed, and messed up the wood floor downstairs. We did the math, and replaced the flooring on our own dime rather than file a claim.

My wife is an attorney and has worked in 1st party property for more than a decade. On all sides. First a defense firm, in-house for one of the major insurers, and even on the plaintiff's side (yes - there are actually some honest plaintiff firms out there helping policyholders). The major issue as she's explained it to me is the re-insurance market. Insurers have reserves to pay claims, yes, but they take out re-insurance policies with larger groups (think Lloyds of London and similar) to cover massive losses in the event of something like a hurricane. So the insurance company is on the hook to pay out the first $XX million in claims, and then re-insurance money kicks in. And with Irma and Michael claims they leaned on those re-insurance companies so heavily that the cost of re-insurance has skyrocketed the last couple of years.

 

When i lived on the east coast of FL, i was on the east side of I95 Approx 2 miles from Juno beach.(Not a flood zone) None of the insurance companies would include hurricane coverage on their policies in my area. If i lived a mile inland, on the west side of I95, i could have gotten private insurance with hurricane coverage. At that time, my homeowners was approx 1600 a year without hurricane , and my hurricane policy with Citizens was 1800 per year (not so cheap). My hurricane coverage had an 8k deductible and my house had many wind mitigation features, including Class A shutters, reinforced roof, Cement Block Stucco. etc. On the west coast where i currently live, my private insurance including hurricane w/1k deductible is 1.4k . Citizens at the time was brutal to deal with. I'm sure many people were/are scamming them, but even so their rates were very expensive.
I had heard from a private attorney who did work for citizens that the major claims at that time (2015) were coming from sink hole coverage. I believe many people were claiming sink hole when in fact there was no sinkhole, just ground settling. I think Citizens may have change their coverage since then because they were losing so much money on these phony sink hole claims.

 

Very true, 8 years ago I had a tree fall on a home I was renting out. The neighbor had hired a tree gut to take it down and it snapped and cracked 3 trusses, etc.
The adjuster for the liability carrier for the tree guy(thanks goodness he had it), came out and did the estimate, he measures all kinds of stuff. I asked why, he said it was better to cover every little thing than have me upset and hire an attorney. Long and short check for 28k. It literally cost about $1500 in labor and material to repair.

 

Check your FedNat Policy as they just announced they are dropping most of their Florida policies by June 30th due to not being able to secure re-insurance.

 

So the sinkhole scam worked like this for years until they made changes industry wide...
You have a sinkhole in your backyard, but its a small one that doesn't effect your home or any structure on your property, but there's still a sinkhole on the property, how am i ever going to sell the place? So they make a claim saying i want a whole new house claiming sinkhole coverage.

So they changed the law and now you have what's called "Catastrophic Ground Collapse" which is the same think as sinkhole coverage but this time the structure was engulfed by the sinkhole and not just hole in your backyard. Sinkhole coverage down here in South Florida is about $10, which tells me there are no sinkholes down here and the likelihood of a claim is beyond miniscule. Whenever a coverage is cheap that tells you that the probability is extremely low.

 

Because they are known as the "insurer of last resort" but they pay out claims just like everyone else. I strongly recommend them especially in this current insurance climate.