unrelated topic: do you know if 21st Century appoints independent agents? Been looking all over the Internet for this and have come up with a big zippo. Their auto rates are pretty solid in this area.
Foremost is the IA arm. You and I can’t get 21st Century.
I have a feeling that their rates aren’t sound from an actuarial standpoint and are going for a market share grab. Down here the rates are outlandishly low.
April 20, 2011 at 2:12 pm
FLagent/insured says:
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Great article and well written. Pointedly states the real truth, that anyone with a private carrier is funding Citizens.
I’m sure the people at Citizens would rather work somewhere else.
I have a high steem for Mr. Hoyos. But, In the Sun Sentinel There was an article on the salaries of Citizens employees. The salaries are absurd. The claims they pay are absurd. The treatment they give agents is absurd. Agents are constantly threatened. Some agents receive 10% commission and others 12%.
Yes some companies have closed. A homeowners company who sold directly to consumers had a CEO and staff with no licenses. One company in Coconut Grove had an office office that looked like an extension of Monty’s.
I have never been able to earn $100,000 in a year. Mu concern is for my clients – to provide them with excellent service and HONESTY
The commission percentages are not 10% nor 12%. If the news media is so intent on slamming insurance agents as greedy they should get it right! Commission rate is 10%, but wait the use of government math comes into play, because it is not on the entire premium.
$1,000 premium less the hurricane premium portion say $110 avg in North and Central FL (South Florida the hurricane premium is much more) less the state fees and assessments $71 leaving $819 in premium. So the commission is $81.90. Hey I’m not complaining, but don’t paint the agent as these people making a “killing” off of Citizens. We also must take photo’s of the property, that’s an expense to drive out to the property (especially with gas prices as high as they are) and we have office help to process the policy and you must pay the agent who wrote the business, who gets anywhere from 30% to 50% of the commission. Of course there is the $125 licensing fee from the State and the 4 hour annual course the agent must take to renew their license, because Citizens is so complex. It’s time, we the agent, start educating the public as to the real numbers and cost of doing business.
Sensible points made, for once, on the absurd property insurance market in Florida. Mr. Hoyos obviously forgot to comment on the legislative ‘Magic Wand’ used most extensively in Florida. This is the device that creates a healthy, profitable insurance market out of splinters and ashes. The Magic Wand is the preferred actuarial model currently in use in Florida.
Mr. Hoyos has presented a very one sided view on this issue. I am sure he has been around long enough to know what happened to the insurance market in South Florida after Andrew and then again after Wilma. The private market deserted the area. If Citizens or the JUA had not existed, we would have had no insurance market. I have worked personally with many of Citizens employees for quite some time working on the agents advisory committee. They are hard working people who are doing their best to operate a company whose rules and regulations are constantly changing based on how the politcal wind blows as well as the real wind. Citizens rates should not be competitive with the private market and for a while they were not. A few years after Wilma many new carriers entered the market to write business. Of course they were lightly capitalized and could not write much business. When windstorm mitigation discounts were, in my opinion, arbitrarily doubled, premiums got too low and several companies went under even without hurricanes. Thousands of insureds got bounced back and forth from Citizens to private companies and back to Citizens again. Why did they go back to Citizens? It wasn’t just rates. The market could not absorb the amount of exposure and many companies shut down for new business. Many of those risks were unacceptable to any voluteer company and were only acceptable on a “takeout” basis.
Mr. Hoyos mentions several segments of the population that are suffering as a result of Citizens assessments. The fact is that many of these people would have no insurance if it wasn’t for Citizens. How many private companies are going to insure mobile homes in South Florida? How many want low value old homes? How many want renters? Before hurricane Andrew companies didn’t want these risks either.
You think higher rates will solve the problem and the big companies will come back???? Has anyone gotten a quote from a CEO from a major carrier who is willing to go on record and say that? The fact is after Wilma, rates went through the roof and companies left. I am not blaming them. They are for profit organizations and did not see how they could make a profit based on the risk they were taking. They were over exposed. They had not managed their portfolio of risk. They are not going to make that mistake again. Or will they?
Raising Citizens rates is probably a foregone conclusion but hundreds of thousand of Floridians who have no other choice but Citizens are the ones that are going to pay the price. Everyone is talking about assessment like they are 50% of someone’s premium. In reality they are probably less than 5% of the premium. Sure they could go up if there is a storm but whats the difference between higher premiums and higher assessments? Nothing to a policy holder. It’s still money out of their pocket.
Lastly, some say that we need to reduce the type of policies that Citizens can offer , lower the limits etc. Thats real easy for a legislator from North or Central Florida to say. After all how many of their voters will that affect. South Florida will bear the brunt of these changes just like South Florida bears the brunt of most of the State’s problems. Would Mr. Hoyos have use tear down all the coastal property that made Florida what it is today. Our coast is what drives our economy. Tourists are not coming here to visit our swamps. Unless we build theme parks in them.
how about some ideas to save both Citizens and Agents alot of time and money.
1. Stop requiring proof that coverage is not available in the voluntary market. duhhh. No agent in his/her right mind prefers to do business with Citizens over using the voluntary market
2. Stop requiring proof that 20 story Condo Buildings Built after 1986 are Fire Sprinklered and have Reinforced Concrete Roofs. Learn a bit about Building Codes
3. I could go on but I must get back to work
Mr. Willis you do have many valid points except for the point on fees. I’m and independent agent in South Florida and I don’t own a home here in florida, yet I have to pay fees (FHCF) on other insurance policies to cover Citizens? What does Citizens have to do with our car insurance? There is a misconception that there are very few private companies writing in Florida, if I can’t write it with the private companies I can write it with the surplus lines. The only reason I would write with Citizens is because their price is cheaper point blank. And the reason they are cheaper is because they are run by the Tallahasee.The government should not be in the private sector! Citizens should be closed down and allow the open markets work. When Andrew hit,no one expected the massive losses, the insurance companies have smartened up. If the price of insurance is to expensive for someone, then rent.
Right on Rolando. People in Citizens are paying less than people with private markets who are also funding Citizens. It needs to be abolished and State Farm needs to have their contract ripped.
State Farm agents need to have their files audited. So many I know are contracted with other carriers and write the Citizens anyway.
State Farm also needs to allow their agents to write raw new business with those carriers or no home business at all. There’s no reason that I should be running into homes 10 miles from the coast built in 2006 insured with Citizens.
This article is complete BS, as a person who lives in an area near the coast I tried to get private insurance but no one will cover me (I’m 8 blocks from a river in a average neighborhood, not a McMansion by the sea). Citizens is way more than I used to pay through State Farm when they did offer insurance. To say that i can find private insurance that would be as reputable as citizens is a outwright lie.
You can always go to Lloyds of London, if they’ll insure legs and breads I’m sure they’ll insure your home. The availability of private insurance isn’t the *real* question, it’s the affordability. With Lloyds you’ll probably be paying close to 10K to insure your home, or more.
Yes. BS. Load of Crap. To hell with these private insurance companies who claim to be unable to “compete” with Citizens. Not one of them bastards will write a policy for me. So I ask, what competition are they talking about. Only Citizens will write a policy so there is NO competion. I hate to slip towards socialism but Florida should have canceled the licenses of all the private insurance companies so that Citizens could include the lower risk home premiums in the entire insurance pool and bring everyone’s rates down. The sole agenda of every single insurance agency that can write home policies is the elimination of Citizens so that they can hike the rates up hundreds of percent. It’s no exageration. My Rates went up 200% between 2003-2007. The rate was scheduled for two more increases in 2008 that would have increased my $3,600 payment (2000 square foot home) to more than $7,800 which would have exceeded my mortgage payment. Charlie Crist was able to put an end to the rise and roll back the rate to nearly my 2003 cost (albeit with crappier options). Insurance, which exists for the public good, is allowed to operate as for profit business which means that they do not represent the insured but rather, they have an obligation to pay dividends to shareholders and bonuses to executives. Switch all insurance to non-profit organizations, cap salaries appropriate for regions, require oversight and full access of organization financials to the public. Insurance in its current form is nothing but a pyramid scheme. Agencies are licensed with a percentage of commission. Agents get a cut of those commissions. It’s a pyramid scheme plain and simple. We the Sheeple are the losers. With all of the recurring disasters, drout, fire, flood, tornado, hurricane, earthquake, mudslide, etc. we’d all be better off if the pool were nationwide. You never know what disaster is going to come your way. The only benefit an insurer should get from this “industry” is wages for good, honest people to write policies and process claims. Why non-profit? Because our Federal government is incompetent and would just screw it up . . . just like they have screwed up our national debt.
I have a 1986 Mobile home where I own the property and currently have Citizens homeowners insurance. I was told to go to Lloyd of London that they would write homeowners insurance for me at a lesser rate. Now I am being told that this would be a mistake because they are not state insured and if there was a major hurricane they would not be able to cover the losses. Anyone have any information?
If Citizens were a private company the state would shut them down.
agreed. But now they’re too big to go away completely. I’m sure the folks at Citizens aren’t in any hurry to give up their jobs.
The people at Citizens, much like other government employees, create work to make themselves seem important.
unrelated topic: do you know if 21st Century appoints independent agents? Been looking all over the Internet for this and have come up with a big zippo. Their auto rates are pretty solid in this area.
Foremost is the IA arm. You and I can’t get 21st Century.
I have a feeling that their rates aren’t sound from an actuarial standpoint and are going for a market share grab. Down here the rates are outlandishly low.
Great article and well written. Pointedly states the real truth, that anyone with a private carrier is funding Citizens.
I’m sure the people at Citizens would rather work somewhere else.
I have a high steem for Mr. Hoyos. But, In the Sun Sentinel There was an article on the salaries of Citizens employees. The salaries are absurd. The claims they pay are absurd. The treatment they give agents is absurd. Agents are constantly threatened. Some agents receive 10% commission and others 12%.
Yes some companies have closed. A homeowners company who sold directly to consumers had a CEO and staff with no licenses. One company in Coconut Grove had an office office that looked like an extension of Monty’s.
I have never been able to earn $100,000 in a year. Mu concern is for my clients – to provide them with excellent service and HONESTY
I have never heard of an agent getting 12% from Citizens.
The commission percentages are not 10% nor 12%. If the news media is so intent on slamming insurance agents as greedy they should get it right! Commission rate is 10%, but wait the use of government math comes into play, because it is not on the entire premium.
$1,000 premium less the hurricane premium portion say $110 avg in North and Central FL (South Florida the hurricane premium is much more) less the state fees and assessments $71 leaving $819 in premium. So the commission is $81.90. Hey I’m not complaining, but don’t paint the agent as these people making a “killing” off of Citizens. We also must take photo’s of the property, that’s an expense to drive out to the property (especially with gas prices as high as they are) and we have office help to process the policy and you must pay the agent who wrote the business, who gets anywhere from 30% to 50% of the commission. Of course there is the $125 licensing fee from the State and the 4 hour annual course the agent must take to renew their license, because Citizens is so complex. It’s time, we the agent, start educating the public as to the real numbers and cost of doing business.
Sensible points made, for once, on the absurd property insurance market in Florida. Mr. Hoyos obviously forgot to comment on the legislative ‘Magic Wand’ used most extensively in Florida. This is the device that creates a healthy, profitable insurance market out of splinters and ashes. The Magic Wand is the preferred actuarial model currently in use in Florida.
Well said, Mr Hoyos. Was this printed in the Sun-Sentinel, St Pete Times, or other insurance bashing newspapers? If not, it should be.
Mr. Hoyos has presented a very one sided view on this issue. I am sure he has been around long enough to know what happened to the insurance market in South Florida after Andrew and then again after Wilma. The private market deserted the area. If Citizens or the JUA had not existed, we would have had no insurance market. I have worked personally with many of Citizens employees for quite some time working on the agents advisory committee. They are hard working people who are doing their best to operate a company whose rules and regulations are constantly changing based on how the politcal wind blows as well as the real wind. Citizens rates should not be competitive with the private market and for a while they were not. A few years after Wilma many new carriers entered the market to write business. Of course they were lightly capitalized and could not write much business. When windstorm mitigation discounts were, in my opinion, arbitrarily doubled, premiums got too low and several companies went under even without hurricanes. Thousands of insureds got bounced back and forth from Citizens to private companies and back to Citizens again. Why did they go back to Citizens? It wasn’t just rates. The market could not absorb the amount of exposure and many companies shut down for new business. Many of those risks were unacceptable to any voluteer company and were only acceptable on a “takeout” basis.
Mr. Hoyos mentions several segments of the population that are suffering as a result of Citizens assessments. The fact is that many of these people would have no insurance if it wasn’t for Citizens. How many private companies are going to insure mobile homes in South Florida? How many want low value old homes? How many want renters? Before hurricane Andrew companies didn’t want these risks either.
You think higher rates will solve the problem and the big companies will come back???? Has anyone gotten a quote from a CEO from a major carrier who is willing to go on record and say that? The fact is after Wilma, rates went through the roof and companies left. I am not blaming them. They are for profit organizations and did not see how they could make a profit based on the risk they were taking. They were over exposed. They had not managed their portfolio of risk. They are not going to make that mistake again. Or will they?
Raising Citizens rates is probably a foregone conclusion but hundreds of thousand of Floridians who have no other choice but Citizens are the ones that are going to pay the price. Everyone is talking about assessment like they are 50% of someone’s premium. In reality they are probably less than 5% of the premium. Sure they could go up if there is a storm but whats the difference between higher premiums and higher assessments? Nothing to a policy holder. It’s still money out of their pocket.
Lastly, some say that we need to reduce the type of policies that Citizens can offer , lower the limits etc. Thats real easy for a legislator from North or Central Florida to say. After all how many of their voters will that affect. South Florida will bear the brunt of these changes just like South Florida bears the brunt of most of the State’s problems. Would Mr. Hoyos have use tear down all the coastal property that made Florida what it is today. Our coast is what drives our economy. Tourists are not coming here to visit our swamps. Unless we build theme parks in them.
how about some ideas to save both Citizens and Agents alot of time and money.
1. Stop requiring proof that coverage is not available in the voluntary market. duhhh. No agent in his/her right mind prefers to do business with Citizens over using the voluntary market
2. Stop requiring proof that 20 story Condo Buildings Built after 1986 are Fire Sprinklered and have Reinforced Concrete Roofs. Learn a bit about Building Codes
3. I could go on but I must get back to work
Mr. Willis you do have many valid points except for the point on fees. I’m and independent agent in South Florida and I don’t own a home here in florida, yet I have to pay fees (FHCF) on other insurance policies to cover Citizens? What does Citizens have to do with our car insurance? There is a misconception that there are very few private companies writing in Florida, if I can’t write it with the private companies I can write it with the surplus lines. The only reason I would write with Citizens is because their price is cheaper point blank. And the reason they are cheaper is because they are run by the Tallahasee.The government should not be in the private sector! Citizens should be closed down and allow the open markets work. When Andrew hit,no one expected the massive losses, the insurance companies have smartened up. If the price of insurance is to expensive for someone, then rent.
Right on Rolando. People in Citizens are paying less than people with private markets who are also funding Citizens. It needs to be abolished and State Farm needs to have their contract ripped.
State Farm agents need to have their files audited. So many I know are contracted with other carriers and write the Citizens anyway.
State Farm also needs to allow their agents to write raw new business with those carriers or no home business at all. There’s no reason that I should be running into homes 10 miles from the coast built in 2006 insured with Citizens.
This article is complete BS, as a person who lives in an area near the coast I tried to get private insurance but no one will cover me (I’m 8 blocks from a river in a average neighborhood, not a McMansion by the sea). Citizens is way more than I used to pay through State Farm when they did offer insurance. To say that i can find private insurance that would be as reputable as citizens is a outwright lie.
You can always go to Lloyds of London, if they’ll insure legs and breads I’m sure they’ll insure your home. The availability of private insurance isn’t the *real* question, it’s the affordability. With Lloyds you’ll probably be paying close to 10K to insure your home, or more.
HA! Meant to say “beards” not breads… guess I’m hungry.
Yes. BS. Load of Crap. To hell with these private insurance companies who claim to be unable to “compete” with Citizens. Not one of them bastards will write a policy for me. So I ask, what competition are they talking about. Only Citizens will write a policy so there is NO competion. I hate to slip towards socialism but Florida should have canceled the licenses of all the private insurance companies so that Citizens could include the lower risk home premiums in the entire insurance pool and bring everyone’s rates down. The sole agenda of every single insurance agency that can write home policies is the elimination of Citizens so that they can hike the rates up hundreds of percent. It’s no exageration. My Rates went up 200% between 2003-2007. The rate was scheduled for two more increases in 2008 that would have increased my $3,600 payment (2000 square foot home) to more than $7,800 which would have exceeded my mortgage payment. Charlie Crist was able to put an end to the rise and roll back the rate to nearly my 2003 cost (albeit with crappier options). Insurance, which exists for the public good, is allowed to operate as for profit business which means that they do not represent the insured but rather, they have an obligation to pay dividends to shareholders and bonuses to executives. Switch all insurance to non-profit organizations, cap salaries appropriate for regions, require oversight and full access of organization financials to the public. Insurance in its current form is nothing but a pyramid scheme. Agencies are licensed with a percentage of commission. Agents get a cut of those commissions. It’s a pyramid scheme plain and simple. We the Sheeple are the losers. With all of the recurring disasters, drout, fire, flood, tornado, hurricane, earthquake, mudslide, etc. we’d all be better off if the pool were nationwide. You never know what disaster is going to come your way. The only benefit an insurer should get from this “industry” is wages for good, honest people to write policies and process claims. Why non-profit? Because our Federal government is incompetent and would just screw it up . . . just like they have screwed up our national debt.
I have a 1986 Mobile home where I own the property and currently have Citizens homeowners insurance. I was told to go to Lloyd of London that they would write homeowners insurance for me at a lesser rate. Now I am being told that this would be a mistake because they are not state insured and if there was a major hurricane they would not be able to cover the losses. Anyone have any information?