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.
We’ve been discussing job loss, or “unexpected unemployment,” insurance. The subject will come up during a home buyer’s negotiations with lenders or builders, and Florida borrowers should know that the insurance will likely be presented as coverage at no cost to the home buyer — “Why not? It’s free!” But it’s not really free — the premiums can be steep, even though the lender gets a wholesale rate from the insurance company, and are rolled into other costs or fees associated with the purchase. In addition, there are eligibility rules and caps on monthly benefits to consider.
In our last post, we were talking about the fate of Florida’s homeowners insurance report card. Mandated by a 2007 law, the report card was intended to be a tool for Florida homeowners to compare insurance companies using just a few key measures. After years in development, the first report card was completed in December.
As the Florida Legislature works on bills to change the insurance market in the state, a state-mandated homeowners insurance report card dies a quiet death. Lawmakers approved the report card in 2007 to give Florida homeowners a way to compare insurers as well as to move insurers to improve their customer service.
The Florida Senate Banking and Insurance Committee has been busy lately. A bill that lawmakers hope will send Floridians away from Citizens Property Insurance Corp. made it out of committee on a 6-4 vote this week. If enacted, the proposed law would raise premiums and limit the types of coverage the state-run insurer could offer.
Lawmakers are delivering on their promise that insurance would be a major focus of this legislative session. A bill advanced in the Florida Senate recently that would dramatically change the way insurance companies institute rate hikes. The proposal would allow homeowners insurers to raise rates by a statewide average 15 percent above their current rates without prior approval of the Office of Insurance Regulation.
Property insurance in Florida could soon see hefty changes. Republican lawmakers have recently proposed bills that would raise Citizens Property Insurance premiums by as much as 25 percent a year and could prevent many policyholders from receiving coverage.
