Devoted to the Insurance industry and all thing related

A much-needed change in the drastic spike of Florida property insurance premiums has finally begun with yesterdays insurance reforms.  Newly elected Florida Governor Charlie Crist signed a bill that included a bolstering of the existing state catastrophe fund to $70 billion.

This money will be collected through premiums from insurers and also “provides lower-cost backup coverage to brand-name private carriers, cutting their reliance on expensive policies purchased mostly from offshore ‘reinsurance’ firms.”  

The bottom line to the average Florida homeowner is an expected 5% to 40% drop in insurance premiums.  However, be aware that the catastrophe fund is currently running low and therefore is vulnerable to any future major storms that could deplete it.  If these circumstances arise homeowners might have to pay “fees on home, auto, business and other types of insurance to repay the debt.”

 

Hopefully the next several years and beyond are more like the 2006 storm season and not the 2004 and 2005 seasons.  I suppose the actions taken by the legislature and the new bill signed yesterday is at least an attempt at fixing the problem.  What is your take on the new laws and whether you think they will make a short or long-term difference for business and homeowners?  I have listed below some of the new changes signed into law.

• A repeal of rate hikes and punitive pricing at Citizens Property Insurance, the state-run insurer for those rejected by the private market. Rules designed to keep it from growing and competing with private carriers forced Citizens to charge more than private insurers. Citizens has become Florida's largest insurer, covering one of four homes and businesses.

 

• Flexibility for homeowners to buy policies without hurricane coverage. Lenders' agreements are needed for those with mortgages.

 

• A requirement, beginning in 2008, that companies that sell home insurance in other states must also offer it in Florida if they wish to do other business there.