How Internal and North Florida Homeowners Subsidize Beachfront Estate Insurance

How Internal and North Florida Homeowners Subsidize Beachfront Estate Insurance

Florida home insurance crisis still lives and Florida homeowners insurance companies continue to leave the state and seek large interest rate hikes. Both companies and state regulators can not agree on the amount landlords ought to pay to insure losses against major hurricanes in Florida.

As a result of the early 1990s, Florida began to introduce special assessments of all Florida homeowners insurance policies issued and created a state-owned state-owned insurance company called Citizens Property Insurance Corporation to ensure that everyone in Florida can get home insurance for their home .

Florida also created the Florida Hurricane Catastrophe Fund which requires all licensed Florida homeowners insurance companies to buy reinsurance after the losses from a major hurricane reach a certain level. This fund is insurance for Florida insurance companies and helps to ensure that they do not have to absorb all the costs of a major hurricane event.

Last but not least, Florida has a company called Florida Insurance Guaranty Association FIGA, which goes into paying your claim up to a certain level if your Florida home insurance company runs out of money and is declared insolvent.

These special assessment items on your Florida Home Insurance Mail can cause you to pay line item entries for many years to come. You may be asked to make the difference when the Citizens Property Insurance Corporation and the Florida Hurricane Catastrophe Fund do not have the money to fulfill their obligations. Or you can be judged for the difference if FIGA does not have the money to pay claims filed against a Florida homeowner insurance company that became insolvent.

So far, high level, each of these different devices and the protection they offer are meaningful. And when they work properly, they help further diversify Florida's hurricane and help make it attractive for Florida home insurance to continue doing business in the state.

The Florida Insurance Acts passed 2007 and 2008, however, have changed and politicized the objectives of each of these units to a point where they no longer function as originally intended. Why? Because Florida legislators arent willing to tell the voters the truth that these devices are now seriously underfinanced and not positioned to do what they should do. Even worse, many Florida consumers do not realize they are paying for any other Florida home insurance.

Currently, both the Florida Hurricane Catastrophe Fund and Citizens Insurance Florida do not have enough money and are too dependent on an unfriendly bond market to satisfy their responsibilities. Both organizations need to borrow before Florida hurricanes happen with limited success to come up with the money they need and they get short on the bond market because the country continues to work through the financial crisis.

Citizens Property Insurance Corporation is the organization that gets most of us to subsidize Florida insurance costs for someone else. Each of us will be required to pay annual special assessments for many years to cover the cash deficiencies that Citizens Property Insurance had as a result of the 2004 storms. Cash flow is just another way of saying that those who were insured with citizens for 2004 storms simply were not sufficiently paid for that coverage. Many of these homes are older homes located in Florida's most susceptible to hurricanes. After Florida Hurricanes 2004, 2005, Florida legislators decided to freeze home insurance rates charged by citizens a politically popular decision that also resulted in all Florida subsidizing household insurance rates for others living in the areas most vulnerable to hurricanes.

Last but not least, since the citizens have been frozen in recent years, even when consumers can find home insurance in Florida in the private market, they still get the choice to be insured by the citizens and be underprivileged for their insurance.

This subsidized insurance that many citizen policyholders receive comes at a price. It is funded mainly through special assessments that we all have to pay on our Florida homeowners insurance bills each year. These assessments have become so heavy that Florida home insurance is not enough to pay the total cost. That's why you see many of them on your Florida car and insurance bill as well.

If you are tired of paying Florida homeowners insurance premiums by someone else, now it's time to get your voice heard during the current session of Florida legislators. Tell the legislators that you have voted for and sent to Tallahassee that you want home insurance in Florida for citizens


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