May 21, 2012 11:47 AM
Got some good reader feedback on my Sunday print column on South Florida's ongoing property insurance mess and the higher costs/lower coverage for homeowners stuck with state-run Citizens Property insurance.
I'll share some feedback below, after the jump. Some readers pointed out that Citizens has been drastically cutting back "mitigation credits" for things like storm shutters and windows, allowing them to raise rates beyond the supposed 10 percent cap. Some readers were irked at getting dropped by insurance giants like Allstate and State Farm, who seem to want all profit and no risk. And some want national catastrophe insurance, but that's going to be a tough sell because of troubles with the national flood insurance program and the smaller-government mood in Congress.
As I wrote in the column:
Higher rates and diluted coverage are going to be recurring themes in coming years for Citizens policyholders, as company executives and state politicians try to shrink the customer base from its current 1.45 million. Citizens, which had only 1 million policies a few years ago, keeps growing as private insurers flee the state or go bankrupt.
The problem: Citizens is a virtual monopoly in many areas, including large swaths of South Florida, so there is no consumer choice. For many of the 337,000 Citizens customers in Broward and Palm Beach counties (myself included), there is no private insurance alternative. And if private insurers won't come back until rates are allowed to climb to the stratosphere and Citizens bleeds us dry getting there, then a competitive market seems pretty meaningless.
From Ben Lowe of Boynton Beach:
Citizens keeps having these new inspections that purposely look for small, insiginificant reasons to raise premiums. In fact, in this last round, I was told I would lose a huge discount because my roof is pre-2001, even thought it is made of solid, concrete tile. The Citizen's agent admitted to me that I would get the discount if I replaced the roof with a cheap shingle roof even though it wouldn't be as good as the one I already have.
From Gregory Murphy of Lighthouse Point:
We also dropped our windstorm; we were able to do so because our mortgage has been paid off. Our policy went up 50% this year to $4,000.00 with a $20,000.00 deductible...How will we sell our homes when the windstorm rates plus homeowners rates make our homes unsaleable? Imagine what the rates will become in five, ten or fifteen years. No one will be able to afford the mortgage along with the exponentially exploding insurance rates. A big thank you to our Florida State Legislature for handling this crisis so well!!
From Marc Velletri:
The other thing happening is Citizens is removing all windstorm mitigation credits. Two years ago after I paid for my own wind mitigation inspection, I received $934 in credits from Citizens. This year they demanded a new inspection. I spent two days with their inspector who must have taken 100 photographs of my property and wanted to see original labels of impact windows that were installed in 2005 (he claimed the stamps in the corner of the glass were not legible when any moron can tell they are impact windows). The end result was all credits were removed and I was notified my premium would increase by $975. My neighbor saw his go up by $1,400...We are getting to the point that you have to be rich to afford to own a home in South Florida just because of the insurance and property taxes.
From Thomas J. Hyle Jr.:
I can find no other insurance than Citizens. Me and my family have lived in South Florida for 3 generations. We have always been with State Farm: Only 3 claims in 49 years...2 for robberies and 1 for my screen after Wilma. I was dropped despite that fact that I have always had shutters. All I can assume is that these companies are not really insurance companies ( where there is always risk) but in the guaranteed profit only business.
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