Insurance - Change in policy beginning Aug 15

[Smiling JOe]

This afternoon, I was told by a State Farm agent that beginning Aug 15, they will not be insuring homes within 5000 ft from the Gulf. :eek: Currently, there rule of thumb (or tape) is 2000 ft from the Gulf. The rule of 500' from the Bay will remain unchanged at this time. I am uncertain if other insurance companies will follow suit. Anyone heard reports of such from other companies.

I have also recently heard from second home owners in this area, that their insurance companies were dropping second-home policies in FL. :eek:

The State Farm agent also said that they were not isuing policies for homes older than those built in 2003, unless you had documents proving that the windows had been replaced with, or they met, today's standard. Even then, you would have to have multiple policies with State Farm or been a long term customer with them and have a few other policies.

I just asked to know some general and basic changes. I would hate to see the little stuff, too.

If anyone knows of changes from other companies, or more changes for S.F., please post them here.

[SHELLY]

My guess is maybe this may have something to do with it: ARTICLE: State panel decides not to order Panhandle to toughen its weak building codes
(http://www.sun-sentinel.com/business/sfl-zinsure12jul12,0,3513736.story?coll=sfla-business-utility)

Insurance Companies (with the exception of Citizens) are in the "risk assessment" business--they've already stuck their hand into the flame once, they're not about to do it again. Just like "we the people" are getting the shaft from the insurers, the insurers are getting the same from "their reinsurers." Reinsurers are telling them to drop the risky stuff along the water, or they'll be paying dearly for reinsurance coverage which will shave off their profits from the "less risky" clients sitting in downtown Orlando.

I read that in 2007 Citizens is going to drop $1million+ homes and non-homestead properties from the roles...we'll see how that turns out.

[Bob]

My guess is maybe this may have something to do with it: ARTICLE: State panel decides not to order Panhandle to toughen its weak building codes
(http://www.sun-sentinel.com/business/sfl-zinsure12jul12,0,3513736.story?coll=sfla-business-utility)

Insurance Companies (with the exception of Citizens) are in the "risk assessment" business--they've already stuck their hand into the flame once, they're not about to do it again. Just like "we the people" are getting the shaft from the insurers, the insurers are getting the same from "their reinsurers." Reinsurers are telling them to drop the risky stuff along the water, or they'll be paying dearly for reinsurance coverage which will shave off their profits from the "less risky" clients sitting in downtown Orlando.

I read that in 2007 Citizens is going to drop $1million+ homes and non-homestead properties from the roles...we'll see how that turns out.Hey now! O'town had 3 hurricanes in '04. Pick another venue.

[SHELLY]

Hey now! O'town had 3 hurricanes in '04. Pick another venue.

The folks in Orlando are getting hosed when it comes to insurance also...BUT...the developers/builders in Orlando didn't get the "wink and nod" that the panhandle builders got that allow them to build flimsy hurricane magnets.

The reinsurance guys sitting over in Switzerland don't care if "your house" in SoWal was built to withstand a direct hit from a Hezbollah Katyusha rocket, all they know is that panhandle builders have always had the greenlight to put up tar paper and chicken wire shacks within spittin' distance of the Gulf and they're going to pay out dearly at the first incidence of a stiff tropical breeze.

We'll see what happens when the group meets to decide on this in a few days:
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"In the Panhandle counties, however, a lower standard is permitted. It's based on projections of 130 mph or greater, and just 1 mile from the coast. Supporters of the lower standard say the Panhandle has more protection from inland forests and is less likely to be in the path of major hurricanes.

In July, Mr. McCarty argued that the Panhandle's weaker codes are a deterrent to attracting the insurance and reinsurance industries at a time when more competition, not less, is important for rate stabilization.

While it's true that the weaker codes reduce the cost of construction, it's a short-term savings at best, at least for consumers. Florida already is in the midst of a property insurance crisis, and weaker building codes that discourage insurers from doing business in an already risky market can only make things worse."
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Now that the housing industry is down for the count anyway, I don't think they'll be able to hold this off any longer...the next sound you hear is the cost of building a home in the panhandle going up....and if you think this is going to lower the cost of insurance?...well, think again. (The insurance folks are pretty generous when it comes to campaign donations ;-) )

[TooFarTampa]

Most of the 30-A area homes are within 1-mile of the coast, and thus the Miami-Dade building codes enacted in mid-2002 would still apply as they do elsewhere in the state, correct? I believe the "more lax Panhandle standards" is something from way back that does not affect most of the South Walton homes being built now or in the past few years purely because they are located so close to the water and thus must follow the state codes. SHELLY I think you are painting with too broad a brush here if we are talking about South Walton homes.

[SHELLY]

SHELLY I think you are painting with too broad a brush here if we are talking about South Walton homes.

When it comes to putting a price on "risk"--reinsurers paint areas with a broad brush...and that "brush" appears to be the size of the state of Florida, (which includes South Walton).

The insurance companies can point to anything to justify their prices. They're crying the blues over the high cost of reinsurance and the reinsurers are saying they are charging higher prices due to the higher risk: I guess we can say "It's an Insurer's Market."

Being a State Farm client, I'm not exactly pleased with where I see this thing going--but I pretty much saw this trainwreck coming for some time now.

[nowgirl]

Have to be honest, I thought State Farm exited nwf homeowner's market long ago....

I've had to replace coverage this year on a commercial building, a 100 year old historic home in Defuniak, and a 2001 Sowal home. Albiet challenging, I was able to find coverage on all three. Overall prices increase from last year, about 30%....should the trend continue, something will definitely have to go!!

My insurance "queen" (she actually returns phone calls) tells me this week that they are definitely running out of options. It seems it is the reinsurers that are cutting off underwriting, and the few companies still taking new policies this year are new companies, not rated by the state.

[TooFarTampa]

When it comes to putting a price on "risk"--reinsurers paint areas with a broad brush...and that "brush" appears to be the size of the state of Florida, (which includes South Walton).

I agree with you here. I believe that in most cases with most insurers the rates are not actuarily sound and somewhat random regardless of actual "risk." Even Citizens will not be required to be actuarily sound until 2008. The reinsurers are even worse as far as painting things with a broad brush. I don't see any genius solutions out there either ... it is ugly.

I just didn't want people reading this to believe that because they own a Panhandle property, it has been subject to less stringent building codes. All the homes permitted since mid-2002 (I can't remember the date) within 1 mile of the coast are subject to those Miami-Dade building codes, and owners should seek any ounce of credit they can get when "shopping" for insurance (not that there is much choice these days).

[Smiling JOe]

TFT, I believe you are correct in stating that most of the homes along 30A are within one mile of the Gulf, however, there are plenty of homes in SoWal which are located beyond one mile from the Gulf.

The big kicker in this State Farm change is that they are no longer insuring homes within 5,000 ft from the Gulf, beginning this Tuesday.

[TooFarTampa]

The big kicker in this State Farm change is that they are no longer insuring homes within 5,000 ft from the Gulf, beginning this Tuesday.

You're right, and it sure seems unfair that they are not distinguishing newer, well built homes from older structures. I wonder how Alys Beach residents are faring with insurance? Are they finding they are getting decent rates or not?

[Smiling JOe]

You're right, and it sure seems unfair that they are not distinguishing newer, well built homes from older structures. I wonder how Alys Beach residents are faring with insurance? Are they finding they are getting decent rates or not?

Since Alys Beach is within 5000ft from the Gulf, State Farm will not be insuring those homes, starting on the 15th, according to the agent with whom I spoke yesterday.

State Farm is distinguishing from the homes built after 2002, but only if they are further than 5000 ft from the Gulf.

[Mango]

That sounds like they will only insure any over the Bridge? That's 3.31 miles from the Gulf.
I believe that State Farm, from what I was told years ago was that they did not insure anyone within a 1/2 mile of the Gulf. They are really pushing it back quite a bit.

[Smiling JOe]

How many people actually have insurance with State Farm within 5000 ft of the Gulf? My understanding years ago when I spoke with an agent, is that State Farm did not insure anything within 1/2 mile of the Gulf. (5000 ft. is 416.66 yds) :idontno:Correct, currently the distance is 2000ft, roughly .5 miles. There are plenty of homes that will be falling into this new range between 2000 - 5000ft whom will be dropped. Ask people in WaterColor, Watersound north, Cypress Dunes, maybe Cypress Breeze, Nature Walk, etc.

[Mango]

Correct, currently the distance is 2000ft, roughly .5 miles. There are plenty of homes that will be falling into this new range between 2000 - 5000ft whom will be dropped. Ask people in WaterColor, Watersound north, Cypress Dunes, maybe Cypress Breeze, Nature Walk, etc.

I had to look up how many feet were in a mile because I forgot.
But there are 5280 feet in a mile, so divided by 5000 ft, that make any property within 1 mile of the beach uninsurable. :shock:

[Smiling JOe]

I had to look up how many feet were in a mile because I forgot.
But there are 5280 feet in a mile, so divided by 5000 ft, that make any property within 1 mile of the beach uninsurable. :shock:That is what the State Farm agent said. As I mentioned earlier, I do not know if the other companies are also changing their policy to not insure within 5000 ft (~ 1 mile) from the Gulf, but I would like to know if you have any knowledge of such. I will be making some more phone calls to other carriers next week.

[nowgirl]

That is what the State Farm agent said. As I mentioned earlier, I do not know if the other companies are also changing their policy to not insure within 5000 ft (~ 1 mile) from the Gulf, but I would like to know if you have any knowledge of such. I will be making some more phone calls to other carriers next week.

Apparently other companies are following suit. I got my cancellation letter today from Universal ..... this is not going to be pretty :eek:

[Starfish]

I spoke with our agent at Citizens today (Fisher-Brown agency) and she said she wasn't aware of anything like that coming up in 2007. But then she also said that she wasn't aware of State Farm's ruling as of today either, so she referred me to the Citizens website for me info.
Just thought I'd pass it along. I am going to try and find out more info.

[jimmyeagle]

American Strategic Insurance (ASI) sent a notice last week that when the policy runs out on my West PCB property in November, it will not be renewed. The reason was "Reduction in Hurricane Exposure." At first it sounded like we didn't have enough hurricanes to warrant coverage :eek: but my agent explained that ASI and other companies are reducing THEIR hurricane exposure.

My agent told me that it is possible other companies will step up to fill the gap for properties less than half a mile from the beach, so I'll just have to wait until sometime in the next month or two before making a decision.

As for Alys Beach, their website says they are coordinating with an insurance agency/agencies for coverage, owing to their status as a Fortified for Safer Living... community.

[Beach Runner]

Everyone near the beach needs to consider getting flood insurance (even if you're not in a flood zone) after today's ruling http://www.cnn.com/2006/LAW/08/15/katrina.insurance.ap/index.html. :eek:

Last fall after I heard about homeowners not getting compensated for their Katrina-damaged homes because of a conflict over whether the damage was caused by flooding or by wind damage, we decided to get a flood insurance policy. Hopefully we'll never need it, but after today's ruling, we're glad we have it. And flood insurance is relatively cheap if you're not in a flood zone.

BTW we got non-renewed in November 2004 by American Strategic. Then in November 2005 we got non-renewed by NorthPointe. I know how scary it is to be wondering if you can get a policy because if you have a mortgage, you have to be insured. Really stressful.

[SHELLY]

I spoke with our agent at Citizens today (Fisher-Brown agency) and she said she wasn't aware of anything like that coming up in 2007. But then she also said that she wasn't aware of State Farm's ruling as of today either, so she referred me to the Citizens website for me info.
Just thought I'd pass it along. I am going to try and find out more info.

It's REALLY scary when the "insurance professionals" haven't got a clue. It just shows you what a can of worms this thing is turning out to be on all levels.

God help us all if a hurricane hits...the fingerpointing and double-talk will be a sight to behold, and victims....uh, policy holders.....will be left "twisting in the wind."

[Scooter]

So tell me. Roughly, was is the cost per year to insure a say 2,500 sq. ft. home within one mile of the gulf?

[Smiling JOe]

So tell me. Roughly, was is the cost per year to insure a say 2,500 sq. ft. home within one mile of the gulf?From what I hear, it sounds like the better question is, "If you have a house within one mile from the Gulf, who will insure it?"

[SHELLY]

So tell me. Roughly, was is the cost per year to insure a say 2,500 sq. ft. home within one mile of the gulf?

This question reminds me of an old joke:

How many lawyers does it take to settle a divorce case?
.
.
.
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.
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.
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.How much money have you got? <rimshot>

:biggrin:

[SGB]

So tell me. Roughly, was is the cost per year to insure a say 2,500 sq. ft. home within one mile of the gulf?

Yesterday I got a quote for our house in Seagrove, which is approximately that size. Note that it's a rental, which limits our options somewhat and it's based on their formula for building costs, which are lower than reality.

Wind (through Citizens) is about $3400
Fire/liability is $1500
Flood is about $330

There is insurance out there, but it is a little harder to find, and rates are going up across the board. There are very, very few insurance companies that offer wind and you have to fit their strict criteria. Citizens is going to be the only option for most people.

[bdc63]

This afternoon, I was told by a State Farm agent that beginning Aug 15, they will not be insuring homes within 5000 ft from the Gulf. :eek: Currently, there rule of thumb (or tape) is 2000 ft from the Gulf. The rule of 500' from the Bay will remain unchanged at this time. I am uncertain if other insurance companies will follow suit. Anyone heard reports of such from other companies.

The State Farm agent also said that they were not isuing policies for homes older than those built in 2003, unless you had documents proving that the windows had been replaced with, or they met, today's standard. Even then, you would have to have multiple policies with State Farm or been a long term customer with them and have a few other policies.

JOe - do you know if State Farm is changing their policy nationally, or has the gulf coast been singled out?

[Smiling JOe]

JOe - do you know if State Farm is changing their policy nationally, or has the gulf coast been singled out?I do not know that answer. I was asking the agent about upcoming changes in the local market.

[Babyblue]

So tell me. Roughly, was is the cost per year to insure a say 2,500 sq. ft. home within one mile of the gulf?


It cost me about 2500 a year with Citizens and I am about 300 feet from the gulf. :shock: