We all knew that this day would come. Over the last several years, State Farm has been asking the Office of Insurance Regulation to allow them to raise premiums in order to stay profitable. When these requests were continuously declined, State Farm started a systematic process of non-renewing thousands of home insurance policies. The hope was that by non-renewing so many policies, their exposure would be reduced to a level where they could still pay claims if Florida gets hit with a bad hurricane season. Unfortunately, on 1/27/09 State Farm announced that they will not longer be writing property insurance in Florida. In addition, there is a good chance that they will be non-renewing $1.2 million property insurance policies over the next few years. Here are some bullet points from Florida Association of Insurance Agents:
The state controlled Citizens Property Insurance Program is going through some major changes in 2009 to reduce their exposure in Florida. If your clients are purchasing homes in the ‘wind pool' (or high risk wind zone), they need to be aware of these changes. This program, which was once a market of last resort, is tightening their guidelines for existing and new policies. The following homes are now ineligible through Citizens effective 1/1/09 for new business and 7/1/09 for renewal:
These new guidelines will affect thousands of homeowners in Collier and Lee counties alone. Where will these homeowners with over $750,000 in value and no shutters go for wind coverage? I give my clients three options:
I hope that this information is helpful. If you ever have any questions or concerns regarding personal insurance, please don't hesitate to contact me.
Until next time,
Ron
Its no mystery that Southwest Florida presents complex insurance challenges for homeowners, mainly revolving around price and availability. As a result, some buyers will request insurance quotes before they make an offer, especially if they are deciding between several properties. How prepared are you when your buyer asks about insurance? Here are some key rating factors that I look for when I start the quoting process:
Keep in mind that these are several other factors that influence insurance rates, but I want you to start thinking about these items when your buyers ask you about insurance. Better yet, why not be prepared with an approximate quote? Many of the listing agents in my network contact me before they even have a buyer to request a comprehensive home, wind and flood proposal. This not only makes you look like a pro but it also provides your clients with the information they need to make a sound investment decision.
Until next time,
Ron
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