Pure B.S. (Rant)

[jackellis]

What they are admitting is they didn't figure it right, and what they thought couldn't or wouldn't happen did. Or, it might have been a lets see what happens mentality, while they try to compound their money.

I don't disagree with your statement, but that's a risk that goes along with annual renewals. I don't know whether insurers offer multi-year policies but I think I would be willing to take one in return for price stability, even if it meant paying a bit more.

When there are a lot of providers (sellers) in the market, competition and an appetite for gaining market share tends to impose price discipline and on occasion, price insanity as companies slash prices. Same thing can happen when banks compete for deposits and end up paying too much.

The older I get, the better I understand why deals that look too good to be true often are.

[chopnhack]

I too am stuck with Citizens, but just got their notice that they intend to cancel the existing policy! That leaves me with ZERO. And fYI, my roof is nailed on 6"/6" with ring shanked nails so ive done what i could to keep my hat on!

[maxparot]

I really feel for the people that are effected by these sudden changes whether it be in price, coverage or just the ability to find a policy.
I am no fan of big business and less a fan of the insurance companies.
It is a huge scam set in motion by business and supported by our government instead of socialized policies to protect people in the event of disaster.
That said individuals have to take their share of the blame for the gamble they have taken living in areas with higher incidence of natural disaster. It is unfair to expect others who have chosen to live in much more relatively safe areas of the states, country or world to pay for your bad choice. These costs are what is associated with living in those areas with increased risk. If the region is to difficult to live in because of risk or cost then you probably should make a decision to go somewhere else.
Living in Arizona we don't have a high risk of earthquakes, tornados or flood. We worry about water and air conditioning. We pay more for water than most other areas of the country. Things left out in the sun here deteriorate at a highly increased rate. During the summer we have monsoon storms that can have high winds and heavy rains. Things can be blown down or away and the spill from the water moving across some areas can be dangerous.
These are the associated risks and costs of living in this region and our insurance is appropriate for our risks. We choose to live here after living in other places and understanding these costs and risks.

[Uncle Cracker]

That said individuals have to take their share of the blame for the gamble they have taken living in areas with higher incidence of natural disaster. It is unfair to expect others who have chosen to live in much more relatively safe areas of the states, country or world to pay for your bad choice.

C'mon... Last year in Florida, there were four houses lost to sinkholes... out of how many? A couple million? And the chances that my insurer even insured those houses is unlikely, given the number of companies that write policies here. So how is that justification for my insurer to write sinkhole coverage out of everybody's policies? Further still, how could I justify moving to another state out of sinkhole fear?

[maxparot]

C'mon... Last year in Florida, there were four houses lost to sinkholes... out of how many? A couple million? And the chances that my insurer even insured those houses is unlikely, given the number of companies that write policies here. So how is that justification for my insurer to write sinkhole coverage out of everybody's policies? Further still, how could I justify moving to another state out of sinkhole fear?

Very simply:
I and many other people are fully aware that a great deal of Florida's land was once swamps that were drained filled and then built on. Then to make matters worse as those areas became inhabited it put demand on the local governments to find water for those people to drink. The water was pumped out from underground aquafers and created the sinkhole problem.
I wouldn't buy a home over an area that was being mismanaged like that and there are areas that have that same problem here in AZ.
The big different is disclosure laws here require sellers to disclose all possible risks of those types to buyers. In other states you must do the research for the posibility of those problems yourself.
The insurer is under no obligation to take on any more risk than the contract they enter into with you requires them to. If you don't like the coverage they offer find a different company that offers what you want and purchase that policy. If you can't afford the policy you have choices. Do without the coverage or move to where the cost of living allows you to live.
My question to you is how do you justify keeping your family in a place that sink holes are a real danger?

[OpaDC]

Very simply:
I and many other people are fully aware that a great deal of Florida's land was once swamps that were drained filled and then built on. Then to make matters worse as those areas became inhabited it put demand on the local governments to find water for those people to drink. The water was pumped out from underground aquafers and created the sinkhole problem.
I wouldn't buy a home over an area that was being mismanaged like that and there are areas that have that same problem here in AZ.
The big different is disclosure laws here require sellers to disclose all possible risks of those types to buyers. In other states you must do the research for the posibility of those problems yourself.
The insurer is under no obligation to take on any more risk than the contract they enter into with you requires them to. If you don't like the coverage they offer find a different company that offers what you want and purchase that policy. If you can't afford the policy you have choices. Do without the coverage or move to where the cost of living allows you to live.
My question to you is how do you justify keeping your family in a place that sink holes are a real danger?

First get your facts right. The areas in Florida that are sinkhole prone are limestone, not swamp areas. You can read all about sinkholes here and here. According to the USGS site "The most damage from sinkholes tends to occur in Florida, Texas, Alabama, Missouri, Kentucky, Tennessee, and Pennsylvania." So based on what you state, all these states should be abandoned. Yes, some of the sinkholes are man made, but they have been happening in these areas long before they were developed. And FYI, swamps are basically just big lakes, with the water being ABOVE ground. I'm guessing you must be a developer in AZ and have some land to sell the rest of us.

From your earlier post -- "That said individuals have to take their share of the blame for the gamble they have taken living in areas with higher incidence of natural disaster. It is unfair to expect others who have chosen to live in much more relatively safe areas of the states, country or world to pay for your bad choice. These costs are what is associated with living in those areas with increased risk. If the region is to difficult to live in because of risk or cost then you probably should make a decision to go somewhere else." Areas were original developed based on commerce and access to potable water, which historically was the coastlines and rivers. This allowed transport of goods by ship. All these areas are prone to flooding. Coastlines can have major storms that are not hurricanes, ask the people of Oregon and Washington. So I guess we all need to get away from the coasts and rivers. (There goes NY, Chicago, Washington DC, etc.) Can't move to the Midwest, tornado alley. And California, well the are supposed to fall away eventually after the "Big One". It's going to start getting crowded in the few "safe" places I guess.

rant off

[Uncle Cracker]

My question to you is how do you justify keeping your family in a place that sink holes are a real danger?

And my answer to you is that 1) the real chance of my home being swallowed by a sinkhole is probably less than that of the sky falling, 2) a sinkhole is a gradual thing, where you see a few cracks, take your family and your morning coffee across the street, and watch your house gradually groan and fall apart over the span of a couple of days, and 3) exactly where could we go where there was not at least some chance of some kind of natural disaster? I don't think there has ever been so much as an injury due to a sinkhole, much less a fatality.

For me, the upside of living in Florida far outweighs whatever the risk might be.

[Pappy]

Insurance companies are betting you won't have a disaster, you are betting you will. By covering areas that are less prone to claims it evens the claims in other areas. If you don't want to insure homes in Florida, no problem. You can't sell in high profit areas either. Either offer you services to everyone, or close your door.

[Kristofor]

I'm with you UC, everyone has to make a decision about what things they value most. I know many co-workers in the Houston and LA areas that wouldn't live in a place where it hits -20 if you doubled their salary. Different strokes and all.

The thing with Hurricanes and river floods is that they are frequently (relative) reoccurring events of wide spread damage. You are likely to have 1000's of times more damage from a hurricane than from a tornado, fire, or sinkhole (perhaps that exclusion was added due to the massive sinkholes from broken/leaking water mains, they don't cover sewer backups without a special rider generally...

In many cases they've stopped paying for people to rebuild on many sections of flood plain of the Mississippi or other rivers (much easier up North where that might be a swath 2-10 miles wide rather than 50, so I'm not sure if that's policy further down the line). Perhaps that would help keep prices lower in FL? The land use decisions down there are a bit odd, a huge chunk of the state is heavily developed in a high risk area. If the result was "build here at your own risk" or "after one major claim we "total" your property and you move out of the danger zone" the economy of the state would tank and current residents would be screwed. The alternative is high (and always rising) insurance rates...

[cgallery]

If you don't want to insure homes in Florida, no problem. You can't sell in high profit areas either. Either offer you services to everyone, or close your door.

The problem is, there are bizillions of local/regional insurance companies that have no high-risk exposure. So national insurers won't stand a chance of selling insurance in (for example) Wisconsin because they have Florida/California in their portfolios.

I think the high-risk states are going to have to start their own pools. If Florida, California, etc., can create a large enough pool, they can drop those rates substantially.

[maxparot]

First get your facts right. The areas in Florida that are sinkhole prone are limestone, not swamp areas. You can read all about sinkholes here and here. According to the USGS site "The most damage from sinkholes tends to occur in Florida, Texas, Alabama, Missouri, Kentucky, Tennessee, and Pennsylvania." So based on what you state, all these states should be abandoned. Yes, some of the sinkholes are man made, but they have been happening in these areas long before they were developed. And FYI, swamps are basically just big lakes, with the water being ABOVE ground. I'm guessing you must be a developer in AZ and have some land to sell the rest of us.

From your earlier post -- "That said individuals have to take their share of the blame for the gamble they have taken living in areas with higher incidence of natural disaster. It is unfair to expect others who have chosen to live in much more relatively safe areas of the states, country or world to pay for your bad choice. These costs are what is associated with living in those areas with increased risk. If the region is to difficult to live in because of risk or cost then you probably should make a decision to go somewhere else." Areas were original developed based on commerce and access to potable water, which historically was the coastlines and rivers. This allowed transport of goods by ship. All these areas are prone to flooding. Coastlines can have major storms that are not hurricanes, ask the people of Oregon and Washington. So I guess we all need to get away from the coasts and rivers. (There goes NY, Chicago, Washington DC, etc.) Can't move to the Midwest, tornado alley. And California, well the are supposed to fall away eventually after the "Big One". It's going to start getting crowded in the few "safe" places I guess.

rant off

The point was to learn to live in an area where you understand the risk, can prepare for them, and handle the economics involved with living there. Whether that means paying insurance regardless of the price or living without the cushion of insurance and paying for losses yourself that is 2 choices a third is to move someplace with other risks or different economics that you may be able to more easily manage. A forth choice is to just cry about it do nothing and be swept away in the wake of a disaster or die.

[FL Buckeye]

When we moved to FL, we looked for areas that would meet our changing livestyle and a lower retirement income, plus be as safe as possible from hurricanes, sinkholes, etc. Since being here, we have had hurricanes go around us, our home got hit by lightning once, and a property down the street had about 40 trucks of concrete pumped into a sinkhole forming under the house. Our insurance has been dropped twice (no claims), and is now twice what it started at with less coverage and higher deductables. And this is much better that those living in higher risk areas. Those being insured by the Citizens Property Insurance, besides having high rates, are also supported by those of us paying other companys' policy premiums as the state requires all of us to pay assessment and recoupment fees into the pool. Mine totals about 5.5% of my premium. Although I shouldn't feel that way, I sometimes have a problem seeing someone on the news complaining about the insurance premium on their multi-million dollar home on the gulf with the great view, especally since some of my money is helping pay for their view. But they are the exception, for the rest of us I feel the pain.

And the so called "national insurers" don't carry Florida in the same "portfolio" as say Ohio or Wisconsin. Thats why its called State Farm of Florida, or whoever's name you want to put in there.

I totally agree with UC, "...the upside of living in Florida far outweighs whatever the risk might be."

I'll step down now.

[luteman]

Homeowners Ins in Michigan

After having insured my home with Citizens for many years, I finally got fed up with their annual premium increases coupled with increasing policy exclusions. So, I did some research on insurance companies based in Mich who only write insurance in Mich. My reasoning was why should I pay sky-high premiums to cover losses occuring in other states? Sure enough, I found a company who not only saved me over $400/year but gave me increased coverage. That company was Farm Bureau.

[Woodwerker]

Just a question, no expert here but why can't Florida issue a mandate that states insurance companies can sell two types of policies?
1) Full coverage including Hurricane coverage.
2) Full coverage minus Hurricane coverage.

If the homeowner declines to purchase option 1 then the mortgage company charges a separate fee (held in escrow) to all members of the state without option 1. If your home were to sell without any hurricane damage you get your escrow money back etc..

This is not a perfect solution but... why should insurance companies be forced to take on large risks for the same price as low risks? All that does is raise the price of low risk customers...