Now just a minute
Remember this bit of news.
Gov. Charlie Crist signed into law Thursday a bill reforming insurance law and cutting property insurance rates in an effort to counteract swelling policy costs for Florida homeowners.Because of being ill of late, I never got around to blogging on this news. I was always skeptical when it came to Insurance reform here in Florida. In an earlier blog post of mine after Allstate announced a rate hike, I wrote-
The result will be several changes to Florida insurance law designed to lower rates. Companies will now be required to seek state approval before raising rates, dropping policyholders during hurricane season or delaying payment of claims. They will also be required to allow coverage options -- wind coverage, for example, will now be optional -- and installation payments on premiums.
Citizens Private Insurance Corp., the state-run insurer of last resort, had scheduled a two-part, 80 percent rate increase for January and March. Those increases have been repealed to make the company more competitive with private insurers. The bill freezes rates at their current level and provides refunds to those that have already paid since the Jan. 1 increase.
Insurers will now be required to return excess profits to policyholders and will face new restrictions when "cherry-picking" -- selling only automobile insurance and neglecting to offer more risky property insurance in Florida.
The bill is expected to save the average Florida homeowner 21.8 percent on property insurance payments.
Now Florida could turn down the rate hike, but then see Allstate either trim those they insure in Florida further, or leave the state entirely. No Insurance company has to sell homeowner's insurance here. Florida could threaten the company over its profitable auto insurance business. But will it do any good for Florida residents?What I said above could be turning prophetic. For insurance companies are now reacting to last week's insurance reform.
That's just three insurance companies, but I'm betting more to follow. Can the State legislature stop this exodus, or are all Florida homeowners going to end up with Citizen's eventually?
TALLAHASSEE -- At least three insurance companies plan to pull out of all or part of covering Florida homes rather than face new insurance laws, an order freezing rates and prohibiting policy cancellations and the general risk of covering property in the hurricane-prone state.
One of the companies, The Hartford, on Thursday sent a letter to agents saying it will cut both personal and commercial lines in Florida over the next two years. Regulators said about 38,000 policyholders will be affected.
The company promised to allow customers one more renewal of their policies, said Office of Insurance Regulation spokesman Bob Lotane.
"Potentially people could have coverage for close to two years from today," he said.
Also on Thursday, Tower Hill told its agents it has stopped accepting all lines of new business in 16 Florida counties, including Brevard, Charlotte, Collier, Indian River and Lee.
And American Strategic Insurance told agents it is restricting its new business to only homes built after 1995, said Scott Johnson, vice president of the Florida Association of Insurance Agents.
That prediction about a 21.8 percent savings on insurance is beginning to ring a little hollow to me.
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