Ron Lazarto

This is the last thing you want to hear from your significant other. You spent months researching the cut, color and clarity of numerous diamonds and finally found the perfect stone that fit your budget. It took another few weeks to figure out whether you should use a gold or platinum setting to complement the cut. Let's not forget the courage that you had to work up to finally ask the big question! Then one day you come home to find out that the ring vanished into thin air. Not too worry though because you had enough insight to schedule this ring on your insurance policy...right?

Most people think that jewelry is automatically covered under their home, condo or renters insurance policy. This is partially correct. The standard policy will only cover jewelry up to $1,000 per incident and will factor in your deductible. In addition, the automatic coverage is offered on a named peril basis which excludes mysterious disappearance. Now don't get me wrong, some policy holders are in the financial position to replace lost jewelry items without blinking an eye but for those who can't, there is a better way. I suggest scheduling the item on your existing policy or purchasing a separate valuable items policy. This will not only cover the ring up to its appraised value without factoring in the deductible, but it will also cover mysterious disappearance. The coverage is not expensive and it will allow you to sleep better at night knowing that this special item is protected.

For those of you who have already taken the steps to property insure your engagement ring I offer one piece of advice. Consider obtaining a new appraisal every few years to make sure that the item is sufficiently insured. One of my clients had a bad experience with her engagement ring before I was able to take over her account. She scheduled her diamond ring 20 years ago for $30,000 but never obtained an updated appraisal since. Keep in mind that her insurance agent should have had at least three appraisals on file but we will save that argument for another day. One day she lost the ring and had to file a mysterious disappearance claim. The insurance company cut the check, and wouldn't you know it, the day she received the check her handyman found the ring in her garage (let me know if you need a referral for an honest handyman!). She promptly sent the check back to her insurance company and a few weeks later she was referred to my attention from her financial planner. The first thing that I asked her to do regarding the ring was to obtain a new appraisal which came out to $50,000.

In addition to jewelry, you can also insure fine arts, furs, antique furniture, sports collectibles, oriental rugs and even wine. Larger collections typically have to be covered under a separate valuable items policy and can be covered on either a ‘per item' or ‘blanket' basis. If you want to learn more about insuring your valuables, please feel free to give me a call!

Until next time...

Ron Lazarto, Client Advisor, Gulfshore Insurance, 239-435-7159

As an independent property and casualty insurance agent in SWFL I'm constantly faced with the challenge of providing my clients with competitive homeowners insurance through financially sound carriers. Finding the perfect combination of low rates and high financial stability ratings can be difficult unless the location in question is built or retrofitted to the latest code and located 1,000 feet or more from the coast. Many carriers are hardening their guidelines by closing specific coastal zip codes or excluding wind coverage while others have decided to non-renew thousands of policies in an effort to reduce their exposure.

So why is this happening? One simple answer is that most carriers are not able to charge sufficient premiums to remain profitable. When asking permission from the state to increase their rates they are declined time and time again. I'm sure that those of you who are property owners think this is a positive decision with the consumer's best interest in mind. I only ask you to consider the following: first, any business that doesn't turn a profit won't be around for long; second, those carriers who continue to write policy after policy without charging the proper rate will be in serious trouble when, not if, Florida gets hit by a bad hurricane season.

How can this problem be solved before disaster strikes? One solution is the Consumer Choice Bill (HB 447) proposed by Senator Mike Bennett and Representative Bill Proctor. The purpose of the bill is to deregulate the Florida insurance industry which in turn will allow carriers to increase their rates to healthy levels. Before you make any judgments, let's look at the bill from both sides.

PROS: If the bill is passed, the best case scenario would be to have a few more years without hurricane activity. This will allow the existing Florida carriers to collect enough premiums to build up their surplus funds and offer their policy holders assurance that they will be able to pay claims after a catastrophic loss. In addition, new carriers will enter the market knowing that they can charge sufficient premiums to turn a profit. This competition will not only drive premiums down but it will also spread the exposure over more carriers. After a few years, Florida's top carriers (ie. Chubb, Fireman's Fund, Chartis and Pure to name a few) will have shed some policies allowing them to open their guidelines for new business in high risk coastal zip codes.

CONS: For the first few years, policy holders will experience significant rate increases until more carrier enter the market. In these difficult economic times, this will apply even more pressure to homeowners who are struggling to pay their bills. To top it off, there is no guarantee that insurance carriers will come flocking to our state to start writing new policies especially if the next bad hurricane season is right around the corner. As a result, more and more policy holders will be forced into the already distressed Citizens program just because their rates will be more affordable. Truth be told, Citizens rates are about 40% too low but that a topic for another blog!

Last year, the Consumer Choice Bill was vetoed by Governor Charlie Christ. Lawmakers will have another shot at pushing the bill through at the upcoming 2010 legislative session. It's my hope that it goes through. Keep in mind that I've been a Naples resident and property owner for over four years so I too will have to pay higher premiums. However, I'm also an insurance agent on the front lines of the industry and see many carriers either suffering financially or not willing to take on the additional risk of writing new policies. Let me know your thoughts about this bill. Are you for or against it and why?

Until next time...

Ron Lazarto (Client Advisor with Gulfshore Insurance, Inc.)

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:

• Effectively, State Farm Florida is handing in its Certificate of Authority, which includes the lines of homeowners, renters, condominium unit owners, personal liability, boats, personal articles, and business property and liability policies. However, the company anticipates no impact on the availability of State Farm auto insurance for Florida residents-nor the availability of life insurance, health insurance, and other financial services offered by agents of State Farm Mutual and its other affiliates.

• State Farm asserts current rates were insufficient to safely protect property insurance customers-a factor directly related to its inability to obtain regulatory approval of what it believes to be adequate property insurance rates. In July, it filed for an overall statewide homeowners insurance rate increase of 47.1 percent. This filing was disapproved on January 12 by the Office of Insurance Regulation.

• The company says it will utilize a two-year withdrawal to minimize disruption to the market and to its policyholders, which will also require regulatory review, and no action will be taken until the regulatory process is complete.

• Even without a hurricane, State Farm Florida's operating costs have risen as day-to-day claims have increased both in their number and severity. State-mandated discounts have further reduced needed revenues. During the first three quarters of 2008, even with no hurricanes, State Farm Florida lost $201 million in surplus.

• State Farm Florida, is a domestic carrier established in 1998 as a stand-alone company. After billions in losses in 2004, it borrowed $750 million from State Farm Mutual, but it has not been able to repay the note.

• State Farm Florida currently services approximately 1.2 million residential insurance and other related property insurance policies, and is headquartered in Winter Haven with agent and operations offices throughout the state. The State Farm Insurance Companies are represented by 826 agents and 4,479 agency staff members in the state of Florida, and employ 4,801 Floridians in various operational positions.

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:

• Homes valued under $750,000 with: shingle roof 25+ years; tile/metal/other roof 50+ years; vacant/unoccupied residence; 4 or more mortgages.
• Homes valued $750,000 to $1,999,999: no opening protection (ie. shutters or impact glass); single roof 25+ years; tile/metal/other roof 50+ years; vacant/unoccupied residence; 4 or more mortgages.
• Homes valued over $2,000,000: all homes and condos ineligible!!

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:

• Obtain shutters! There is no denying that this will be expensive. However, by doing this, you will not only be eligible for Citizens, but you will also be able to add wind coverage onto your home policy. Some companies only required pre-cut plywood as approved opening protection which is MUCH less expensive than aluminum panels.
• Find a carrier that is willing to include the wind coverage on the home policy without requiring shutters. These companies are few and far between and tend to be more expensive but at least they will offer the coverage.
• Self insure for wind coverage. As an agent, I would never recommend this coverage to anyone who would be strained financially if they had to rebuild their home out of their own pocket.

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:

• How old is the home? This verifies which building codes were in force when the home was built. Insurance companies are giving significant credits for ‘wind resistive' features so homes built 2002 or after typically receive the largest premium reductions as a result of the new code requirements.
• Was the home built with concrete block or frame construction? There are a surprising number of homes in Collier and Lee counties with a frame construction. These frame homes are still insurable but, as you can imagine, the rates tend to be higher.
• Will the home be used on a seasonal basis? Many of my clients only occupy their Collier and Lee homes on an average of three months per year. Insurance companies will require that the home is either in a gated/guarded community or that they have an active centrally monitored alarm system.
• Does the home have hurricane protection on every opening (ie. windows, doors and skylights)? This becomes very important for those homes located in the ‘wind pool' (or high risk wind zone typically within 1,000 feet from the coast). For homes in the wind pool without shutters, a separate wind only policy may have to be purchased from the state controlled Citizens program which tends to be more expensive.
• What is the flood zone? If the zone is considered ‘high risk', does a negative elevation exist? Many insurance companies won't write negatively elevated homes! That's why its so important to work with an independent agent who works with several insurance companies so they will always have options for you regardless of the risk!!

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