Insurer gets approval for homeowners rate increase

October 27, 2009


THE ASSOCIATED PRESS

Universal Property and Casualty Insurance has received approval from Florida regulators to raise its average homeowners insurance rates about 14.6 percent statewide.

Parent company Universal Insurance Holdings said rates were effective Thursday for new business and Dec. 11 for renewal business. Universal is the second-largest private insurer in Florida after State Farm.

Officials said that as of the beginning of this year Universal had 461,000 policies, or about 7.5 percent of the market.

The company is among a flurry of insurers that have sought to raise rates.

Florida Insurance Commissioner Kevin McCarty has said that each request is being considered on its own merits, but in general he sympathized with the rationale for seeking higher rates.

Group backs Florida property insurance rate hike

October 27, 2009

TALLAHASSEE, Fla. — Florida insurance regulators are failing in their duties if they don’t make the state-backed Citizens Property Insurance Corp. raise property insurance rates by 10 percent across the board, a business group lobbyist said Tuesday.

Barney Bishop III, president of Associated Industries of Florida, said it’s “astonishing” that the state-backed insurer would not increase rates on all policies by 10 percent.

“It is our position that every rate should go up,” Bishop told representatives from the Office of Insurance Regulation. “The rates haven’t been actuarially sound for the last five years.”

OIR deputy commissioner Belinda Miller and Bishop sparred over legislative intent.

Bishop argued that lawmakers wanted policies increased 10 percent while Miller said OIR believed the legislation established a ceiling, but that various rates could be assessed and that some decreases would even be awarded.

He called Citizens a cash-starved, bond-challenged entity that has ignored legislative intent by failing to move forward with the double-digit increase.

“They’re gonna be leaving money on that table and that means money that’s not gonna be available to pay losses,” Bishop said.

Citizens was created by the Legislature in 2002 as a safety net to offer property coverage to homeowners without private insurance options, albeit not necessarily at cheaper rates. The fiscal viability of Citizens rests with Florida residents who would make up any losses through a statewide assessment.

Florida residents with auto, residential property or commercial property insurance policies are already paying a 1 percent assessment to shore up the Hurricane Catastrophe Fund tagged with huge losses after the 2004 and 2005 hurricane seasons.

“The only way to pay for those losses is to borrow the money and when you borrow that money you have to pay it back for years and years and years on all of our personal insurance policies and all of our business insurance policies,” Bishop said. “If you’re a small business person you’re going to pay both personally and for your business.”

Bishop said Citizen’s $4 billion surplus is far short of what would be needed to avoid having Florida residents on the hook for millions of dollars in assessments if a big storm struck the state. He said Citizen’s present exposure is $413 billion.

He said an across-the-board 10 percent increase would generate an additional $211.5 million to ease the huge deficit Citizens would find in trying to pay claims following a Category 2 or greater hurricane.

Miller argued the 10 percent was a cap set by lawmakers and not intended to be applied equally to all Citizens’ policy holders.

“We don’t want to increase rates too quickly because people would have a hard time paying for it.” Miller said. “Nor do we want to have a rate that is not adequate to pay their claims. Our concern is to make sure that this strikes the appropriate balance.”

Quiet Atlantic hurricane season a boon for insurers

October 26, 2009


By Jim Loney

MIAMI (Reuters) – Thanks to El Nino, the 2009 Atlantic hurricane season has been the quietest in more than a decade, offering a reprieve for residents in the danger zone and a chance for insurance firms to refill depleted coffers.

With the peak of the season — late August to mid-October — now behind, the Atlantic-Caribbean basin has seen just two hurricanes and a total of eight tropical storms.

El Nino, the Pacific warm-water phenomenon that can produce destructive weather in other parts of the world, played a big role in suppressing Atlantic cyclones this year, experts said.

If the full season, which runs from June through November, ended today, it would be the lowest number of storms since 1997. The last time an Atlantic season produced only two hurricanes was 1982.

After a 2008 season that produced Hurricane Ike, one of the most destructive in U.S. history, the cyclones of 2009 have had virtually no impact on the populous U.S. coasts, the vulnerable islands of the Caribbean or the Gulf of Mexico oil patch.

“There was for all intents and purposes no hurricane damage in the United States this year,” Robert Hartwig, president of the Insurance Information Institute, told Reuters.

“It’s something that will help the insurance industry create very favorable earnings comparisons in the third quarter compared to the third quarter of last year,” he said.

Forecasters saw nothing on the horizon on Wednesday.

“El Nino produced an increase in wind shear,” said meteorologist Todd Crawford of private forecaster WSI Corp.

“If you have an increase in the speed of the winds aloft over the Atlantic it acts to basically chop the heads off any kinds of storms,” he said. Wind shear is a technical term for different wind speeds at different altitudes.

Crawford also said sea temperatures in the tropical Atlantic are cooler, by about 2 degrees Fahrenheit (1.12 degrees Celsius) on average, than the blistering seasons of 2004, when four hurricanes hit Florida, and 2005, which produced 28 storms, the highest single-season total in recorded history.

Hurricanes draw energy from warm water, so cooler sea temperatures can mean fewer and less intense storms.

INSURERS HAPPY

So far this year, only named storms Bill and Fred reached 74 miles per hour (119 km per hour), the threshold for hurricanes. Fred fizzled in the mid-Atlantic without causing damage while Bill raced through Canada’s Atlantic provinces as a Category 1 hurricane, the weakest type, causing few problems.

Ana hit the Caribbean’s Leeward Islands as a depression. Erika plowed into the same area as a tropical storm. Danny, Grace and Henri stayed out at sea.

Only Claudette, a tropical storm that sprouted suddenly in the eastern Gulf of Mexico, made a U.S. landfall, hitting the Florida panhandle.

So far, insured losses don’t appear to have climbed to the $25 million needed to mark it as a catastrophe, according to the Insurance Information Institute.

The quiet season will allow insurers to replenish from Ike, whose $12.5 billion in insured losses put it third on the list of costliest U.S. storms for the industry.

Only Katrina, which caused $43 billion in insured losses when it struck New Orleans in 2005, and Andrew’s $23 billion rampage through south Florida in 1992, cost more.

Hartwig said the industry’s net first-quarter loss of $1.2 billion turned to a profit of $5.7 billion in the second quarter. “In the third quarter that number will have increased, potentially substantially, because of the continued recovery of the markets but also very favorable comparisons with regard to catastrophic losses,” he said.

Over the past 20 years, hurricanes have accounted for 50 percent of all insured U.S. catastrophe losses and tornadoes another 25 percent, he said.

The Florida Hurricane Catastrophe Fund has also had a chance to refill. Cash on hand climbed from $3 billion to $4.5 billion over the past year, according to data compiled by the State Board of Administration, which oversees the fund.

Although the peak has passed, the six-month season still has nearly seven weeks to run. It officially ends on November 30.

“It’s not over,” said meteorologist Jill Hasling, president of Houston’s Weather Research Center, which monitors weather for the offshore oil industry.

“There’s pretty warm water in the Gulf still,” she said. “If we get enough cold fronts in here and cool the water off, we’ll be clear for this season. But it hasn’t happened yet.”

FL Property Insurance Update

April 24, 2009

Only a week left and lawmakers continue resuscitation of a bill they tagged “DOA” when the session began. If you remember my topic about “the turning tide,” I referenced surprisingly little resistance to the “assessable/non-assessable” issue or, as some were calling it…the State Farm bailout bill. It began merely allowing companies to sell both “assessable” and “non-assessable” policies with the latter being exempt from rate regulation. Now both the Senate and House versions—by Sen. Bennett (R–21) and Rep. Proctor (R–20), respectively—appear to have abandoned the issue of “assessability,” focusing instead on which carriers should be free from OIR rate reviews. The fundamental political question remains the same…”If consumers want to pay more why prevent them from doing so?”

While other rate standards such as “inadequacy” or “unfairly discriminatory” still pertain, the central theme is that carriers with favorable writing ratios or substantial accumulated surplus should be free from the burden of “proving” their rates are not “excessive.” Debate is focused on whether such a privilege should be granted to carriers with $500 million, $200 million or less in surplus, and/or writing ratios of 2:1 or better. Odd, I think, since the ability to charge higher rates often means better claims paying capacity, enhanced surplus accumulation, and better solvency, all things being equal. This bill makes no such bestowal on the less well endowed carriers, which is testament to its informal moniker—the State Farm bailout.

Of course, the lower the threshold the more carriers besides State Farm become exempt from rate regulation. One estimate is that 44 with a current Certificate of Authority (COA) could qualify but, again…that’s only IF the lowest surplus thresholds are adopted, and also IF the bill passes, and only IF the governor doesn’t veto it. Now, if all those “IF’s” don’t happen, some large previously departed national carriers might return to Florida, giving consumers and agents another option—a not so thrilling prospect for domestics clamoring for market share and struggling to maintain the writing ratios required by the state’s “Incentive Capital Build-Up” agreements. At the street level, there’s a troubling provision in the Senate version that requires consumers to receive a “quote” (and a signed rejection) from either Citizens or an “admitted carrier willing to write the policy” in order to purchase a policy from an “unregulated” carrier. While nonsensical at best, this requirement isn’t as bad as it sounds; after all, it only applies when you opt for a choice you currently don’t even have. And…it only applies IF you represent one of the qualifying carriers, IF it wants to write the risk in question, IF the bill passes, and IF it doesn’t get vetoed.

Again, it is more apparent that Florida consumers need an agent on their side with the ability to change and adapt. Only independent agents have that ability, and The Wurzel Insurance Agency wants to help. Please visit us online at http://www.wurzelagency.com for more information and to start a quote now.

An Independent Approach To Car Insurance

April 23, 2009

Many consumers are finding they can drive down the cost of car insurance—and the time it takes to select the right policy— by contacting an independent insurance agent or broker.

Because they represent many different insurance companies, independent agents have the flexibility to review rates and coverage from competing carriers and get you the best deal. Plus, they can offer affordable protection for your home, business and other assets. So rather than spending hours gathering quotes from various companies, you can get it done with one simple call or visit to your independent agent or broker.

If you’re thinking of contacting an independent agent, here are a few things to consider:

What’s your lifestyle? Many factors determine auto insurance rates, not just vehicle year, make and model. Companies also look at information about you. If you’ve recently moved, gotten married, had a birthday or experienced a similar life milestone, mention this to your independent agent or broker. You may be eligible to save money on your car insurance.

Sweet 16 doesn’t have to be sour. Having a new teenage driver usually means the auto insurance bill will go up, but there are ways to save. An independent agent or broker can find them for you.

How old is your car? You don’t always need the same level of physical damage coverage on older cars as on newer ones. If you drive an older car, your independent agent or broker can advise you what level of coverage makes the most sense. If you want to keep your physical dam-age coverage, consider raising your deductible—that could save you money each year, too.

Save money on the fun stuff. If you have a motorcycle, boat, RV or other “toy,” you might save money by having it covered by the same company that insures your car. Talk to your independent agent or broker about it.

You may also want to consider separating your homeowner’s policy from your car insurance policy. Bundling your homeowner’s policy with your car insurance doesn’t always save you money. It may, but have your independent agent look at separating the policies— the discount you may have gotten for keeping them together may be outweighed by the lower price another company might have for your car insurance.

To learn more, visit us online or call us at 407-977-5700.

To Bundle, or Not to Bundle

April 23, 2009

Bundling your homeowner’s policy with your car insurance doesn’t always save you money. It may be wise to have an independent agent look at separating the policies. The discount you got for bundling may be outweighed by a lower competitive price. To learn more, visit us online or call us at 407-977-5700.

Are All Insurance Agents The Same?

April 23, 2009

To get the best deal on insurance, many people consult an insurance agent or broker. But did you know that there are different kinds of insurance agents and brokers—and the one you choose can make a big difference in the type of service you get and the choices you’re offered?

Here’s the difference:

Captive agents and brokers. Captive agents work with a specific insurance company, and as part of their business agreement with that company, they can offer only that company’s insurance products. They may also be required to sell other products from that company, such as annuities and investment plans.

Independent agents and brokers. Independent agents and brokers can offer products from many insurance companies. This helps them better serve your interests, as they can review multiple options to find a policy and rate that’s right for you. Insurance rates vary from company to company. Independent agents can put together a customized insurance plan. If you’re ready to contact an independent agent to talk about saving money on car insurance, here are a few things to consider:

Has your life situation changed recently? Many factors determine auto insurance rates, not just vehicle year, make, model, body type and engine size. If you’ve recently moved, gotten married, had a birthday or experienced a similar life milestone, mention this to an independent agent or broker. You may be eligible to save money on your car insurance.

Is your car getting older? You don’t always need the same level of physical damage coverage on older cars as on newer ones. If you drive an older car, an independent agent or broker can advise you on what level of cover-age makes the most sense. Raising your deductible could save you money each year, too.

Do you have another type of vehicle that also needs cover­age? If you have a motorcycle, boat, RV or other “toy,” you might save money by having it covered by the same company that insures your car. Talk to an independent agent or broker about it.

Another plus to working with an independent agent or broker is their ability to offer guidance for all your insurance needs—auto, home, life, business and more. They can customize a package of policies just for you. To learn more or contact an independent agent directly, visit us online or call us at 407-977-5700.

Getting Your Finances In Gear

April 23, 2009

This time of year, thoughts turn to year-end financial matters: paying holiday bills, preparing your tax return and more. It’s also a great time to review the general state of your finances to see if you need to make any changes in the coming year.
Many people don’t consider the importance of insurance in an overall financial plan. But the fact is, no matter how hard you work to build wealth, failure to purchase adequate insurance can be your undoing. On the other hand, paying for coverage you don’t need can also sap your budget. Finding the right balance can be a challenge.
That’s why now is a good time to sit down with an independent insurance agent, like The Wurzel Insurance Agency, and review your needs. Think of an insurance agent as a vital information source, one that can help think through an individual situation and can put together a package of policies, coverage and price that meets specific needs.
An independent agent, like Robert Wurzel, can ask the right questions to help better determine the kind of insurance needed.
Because an independent agent can check prices from many different companies, he or she can help get the maximum coverage at reasonable cost.
Here are just a few of the questions to ask an independent agent as you consider an overall financial plan:
What type of policy is right for me? This depends on factors such as budget, the amount of coverage needed and the level of service you want from an insurance company. Finding the appropriate level of coverage is important. You don’t want to overpay for coverage not needed, but you also want to keep in mind that the worst experience is to have a claim, then discover there’s not enough coverage.
How do rates from different companies compare? Independent agents are licensed to represent multiple insurance companies, so they can shop multiple companies to get the coverage you need at an attractive price.
Are there other ways to save? As a person’s situation evolves—he or she gets married, has kids, buys a new car—check in with an independent agent. Companies offer various discounts for such life changes, and this information could help the agent find additional savings.
To learn more, visit The Wurzel Agency online or call us at 407-977-5700.

Is the tide turning?

April 16, 2009

In article after article, editorial after editorial, and debate after debate, a turning tide is apparent—from avoiding raising premiums at any cost, to avoiding the sticker shock from not doing so any longer. Lawmakers, the media, consumer groups, and regulators are beginning to understand that Florida’s dangerously underfunded Cat Fund is in bad need of shoring. There’s also growing consensus that it is equally irresponsible to continue freezing Citizens’ rates when they were over 40 percent too low almost four years ago. The Senate and House both have bills that “begin” to allow premiums to reflect the fact that Florida has one-quarter of the country’s insured coastal property—just shy of $3 trillion in 2007. Neither chamber, however, eliminates the need for pre-season prayer sessions as both use a “glide path” approach to avoid sticker shock. The idea for the Cat Fund is to reduce the $17 billion TICL (Temporary Increase in Coverage Layer) amount gradually over several years, delaying premium increases from the pass-through of commercially-purchased replacement coverage. With Citizens, the House Insurance Committee bill “allows” increases up to 20 percent a year until premiums also recognize the cost of building on the world’s hurricane highway. The Senate Banking and Insurance Committee, after very contentious debate, adopted 10 percent caps to Citizens’ annual increases.

Another testament to the “turning tide” is a proposal with surprisingly little resistance penned the “assessable/non-assessable” bill or, as some are calling it…the State Farm bailout. It began as an idea to require companies selling residential coverage to provide both “assessable” and “non-assessable” policies with the non-assessable being exempt from rate regulation. The thought was if a consumer wants to pay more at the front-end in exchange for a guarantee of no deficit assessments at the back-end then they should have that right. As both the Senate and House versions now stand—by Sen. Bennett (R–21) and Rep. Proctor (R–20), respectively—the carriers exempt from regulatory oversight for “excessive rates” are only those with over $500 million in surplus. Guess who that is?

Of course, State Farm would qualify for the exemption from rate regulation and could therefore charge the rate previously denied by the OIR and, maybe, stay in Florida; just as some crystal-ballers had predicted would happen. However, many other recently departed nationals or super regional providers of homeowners coverage might also qualify for “open rating,” which would dramatically change the dynamics of Florida’s new domestic residential property marketplace. Indeed, many domestics are less than keen on a concept that would bring back competitors who “might” have a higher price but who can exploit the fact that they are non-assessable and better capitalized. Ultimately, if it becomes law, some will rightfully ask “if open rating is okay at $500 million, why isn’t it okay when a carrier has $400 or $300 million in surplus?” Come to think of it, as long as every consumer has the option to buy an assessable policy from Citizens at suppressed rates, why can’t every voluntary company offer a non-assessable alternative at any rate? Everybody wins…consumers can choose either a cheap assessable policy or an expensive non-assessable one; only Citizens’ policyholders pay for Citizens’ deficits and all companies, domestics and nationals, compete on the same level playing field under open rating. Why not?

As the tide continues to change, it is more apparent that Florida consumers need an agent on their side with the ability to change and adapt. Only independent agents have that ability, and The Wurzel Insurance Agency wants to help. Please visit us online for more information and to start a quote now.

Helpful Information for State Farm Florida Policyholders

March 6, 2009

As part of an effort by Commissioner McCarty to help State Farm Florida customers during the transition of their homeowners’ coverage from State Farm, here is some important information about time lines:

  • State Farm’s non-renewal process will not begin until November 2009. State Farm will provide customers with 180 days (6 months) notice before their policies are non-renewed.
  • Homeowners’ policies are annual policies, so a specific customer’s non-renewal notice will not be sent until six months before the scheduled expiration of their policy.
  • State Farm customers can talk to their State Farm agent or to an independent agent for help in choosing another company that will best suit their individual needs and circumstances.
  • A State Farm customer may choose Citizens Property Insurance Corp., if the customer meets eligibility requirements for Citizens coverage; but State Farm agents cannot just move the policy to Citizens.
  • State Farm does have 30 days from Commissioner McCarty’s Feb. 13 order to surrender its license to the OIR.
  • Surrendering its license does NOT mean that State Farm policyholders will lose their coverage.
  • State Farm will continue to service its customers’ policies until the last policy has been non-renewed — likely to be more than two years from the Feb. 13, 2009 OIR order.

For more information about our agency or for a quote, please visit us online or call us at 407-977-5700.

For the full press release, click here.


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