Florida’s state-run insurance carrier, Citizens Property Insurance, has requested rate hikes that could take homeowners by surprise. Regulators say most of the new rates will be approved without debate, with one exception: the proposed increase for sinkhole coverage.
This is the last post in our discussion of concrete barrel tile roofs and hurricane mitigation discounts. The current inspection form does not include these roofs, because there wasn’t enough data about their performance when the form was designed. The upshot for homeowners is denial or revocation of discounts on their insurance policies. The Florida Office of Insurance Regulation has been talking with policyholders and insurance professionals about this and other problems with the form.
We were talking about the issues with Florida’s current insurance inspection form and mitigation discounts. Both homeowners and insurance professionals are complaining that the form does not allow a discount for concrete barrel tile roofs. The denial or revocation of the discount can mean jumps in homeowners insurance premiums of hundreds of dollars.
We were talking about the story of the three little pigs and the big bad wolf the other day. Someone suggested it was really a metaphor for homeowners and hurricane insurance coverage in Florida. The pigs are the homeowners, and each used different building materials for their little houses. The wolf represents a category 5 hurricane that the pigs hope their homes will survive.
The hurricane season started June 1, and we were talking about the National Oceanic Atmospheric Administration (NOAA) outlook for 2011. The NOAA’s storm estimates are likely included in the data property insurance companies use in rate-setting – especially in states like Florida that are right smack in the middle of “hurricane alley.”
The Atlantic Hurricane Season officially kicked off at the beginning of this month. This is the time of year when the National Oceanic Atmospheric Administration (NOAA) publishes its predictions for named storms, hurricanes and major hurricanes. And this is the time of year when Florida’s property insurance companies focus on the NOAA’s big picture summary instead of the detailed report as they justify their requests for rate increases.
The Florida Commission on Hurricane Loss Projection Methodology has approved the RMS U.S. Model Version 11.0. Insurers in the state can now use the model as they calculate rates — and rate increases — for the coming year. This is the same insurance model we discussed last month, and this is the same insurance model that insurance companies have been circling with some apprehension since its national debut.
Now that the Florida Legislature has finished overhauling property and casualty insurance, Congress is stepping into the fray. According to the author, the proposed bill — or the proposed proposed bill, as it has yet to be introduced — would better define hurricane claims and the allocation of damage between wind and water.
This is the second and last post covering a recent interview with a catastrophe risk assessment expert. The interview was especially interesting in light of recent natural disasters and efforts by Florida lawmakers to protect insurance companies — at the expense of policyholders — from the risks these models have predicted.
The Florida Legislature adjourns this Friday, and the House and Senate continue to wrestle with the insurance bill. The Senate passed SB 408 on Tuesday only to have the House make major amendments to key provisions today. At the top of the list is, again, property insurers’ coverage of sinkholes.
