Insurance is a little mysterious to most people. The risk assessment, the loss projections, rate-setting and reinsurance woes — there are days when it looks as if the industry is working off a Ouija board. “Will there be a hurricane in Florida?” The planchette, under the deft fingers of a group of insurance executives, moves to “yes.” “Will there be much property damage?” The planchette moves to a Y, then a U and, finally, a P. “Yup.”
We are wrapping up our discussion of 2011 weather disasters. When we began this series of posts, Hurricane Irene had not been downgraded, and the damage predictions were just beginning to come in. Since then, the bills for Irene have continued to pile up, and property insurance companies are preparing damage estimates for Tropical Storm Lee.
We are continuing our discussion of weather disasters in the U.S. As we have said in past posts, Florida’s homeowners insurance market is sensitive not only to disasters in this state but also to national and international disasters. Though the state escaped Hurricane Irene last week, it will take some time to know if the estimated $2.6 billion in damage will affect local premiums.
We are continuing our discussion of natural disasters during 2011. The U.S. has had a particularly tough year. For insurance companies, these disasters and others in foreign countries could translate into enormous losses. And although Florida has escaped most of the havoc, homeowners here will likely be paying a portion of the insurance bill.
Florida dodged Hurricane Irene this week, but much of the Eastern Seaboard will not. When the skies have cleared, the damage assessments will begin. Florida may not be so lucky when it comes to dodging the bills — maybe not directly, but through property insurance premiums.
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.”
