They’re not loosing money on their Wind Storm policies…. They have collected billions since Wilma and have paid out NOTHING in wind storm losses. That is a PROFIT. If they are loosing money in other types of claims, that’s one thing. But their losses on sink holes has NOTHING to do with their wind storm rate increases.
Why is it that folks have so much trouble spelling ‘losing?’
Carriers still need to ensure they have adequate reserves for future losses. That is the purpose of rate increases. If Florida was such a hotbed for insurance profits, don’t you think State Farm, Travelers, Liberty Mutual, et. al. would be coming in with guns blazing?
Let’s not forget reinsurance as well. There are many carriers who can’t even break even on certain policies due to this expense and overly permissive mitigation credits. The tide is turning, but we’ve still got that 800 pound gorilla in the room called Citizens.
There is no big secret as to why carriers can’t make money in Florida, writing home insurance. I used to do a lot of home business in Florida in the 80’s, 90’s and up to about 2002 and worked for several “A” rated carriers during this period. Here are the problems–An Insurance Department that is unreasonable and is always right, the actual carriers are always wrong. I’ve dealt with Insurance Departments in about 35 states over the last 43 years and can say without a doubt, Florida is the absolute WORST!! I once had a situation (in the 90’s) wherein the carrier I worked for filed a program to write mobilehome business in Florida. Our rates were about 30% higher than the Florida JUA rates. The Insurance Department came back and said they would not approve any rates that were higher than the JUA. We told the Florida Insurance Department that we didn’t feel the JUA rates were adequate and asked them to provide us with a statement to the effect that the JUA rates were actuarially sound. They refused to do so and told us that we could appeal their decision and it would take about two years to go through the appeals process, etc. What a bunch of sub-cretins!! The other problems carriers face are public adjusters, sink holes and hurricanes every once and a while. Also, does Florida still have their excess profit law? If a carrier makes more than a 5% underwriting profit , they get to give back the amount over 5% to its policyholders? Further, whenever you have an Insurance Commissioner (in any state) that’s elected by the people, there are always problems, because that person is always looking for a higher policical position and as a result, they will make decisions that are great for the voters and bad for the insurance industry. The preceding comments are my opinions and facts, based on actual experience of doing business in Florida. If carriers think things will change, they’re WRONG!!
They’re not loosing money on their Wind Storm policies…. They have collected billions since Wilma and have paid out NOTHING in wind storm losses. That is a PROFIT. If they are loosing money in other types of claims, that’s one thing. But their losses on sink holes has NOTHING to do with their wind storm rate increases.
Why is it that folks have so much trouble spelling ‘losing?’
Carriers still need to ensure they have adequate reserves for future losses. That is the purpose of rate increases. If Florida was such a hotbed for insurance profits, don’t you think State Farm, Travelers, Liberty Mutual, et. al. would be coming in with guns blazing?
Let’s not forget reinsurance as well. There are many carriers who can’t even break even on certain policies due to this expense and overly permissive mitigation credits. The tide is turning, but we’ve still got that 800 pound gorilla in the room called Citizens.
Since it isn’t hurricanes causing the losses, what is it?
–“sinkhole claims, which the insurance companies say are costing them $500 million annually”
–public adjusters
–plaintiff attorneys
–fraudulent claims
There is no big secret as to why carriers can’t make money in Florida, writing home insurance. I used to do a lot of home business in Florida in the 80’s, 90’s and up to about 2002 and worked for several “A” rated carriers during this period. Here are the problems–An Insurance Department that is unreasonable and is always right, the actual carriers are always wrong. I’ve dealt with Insurance Departments in about 35 states over the last 43 years and can say without a doubt, Florida is the absolute WORST!! I once had a situation (in the 90’s) wherein the carrier I worked for filed a program to write mobilehome business in Florida. Our rates were about 30% higher than the Florida JUA rates. The Insurance Department came back and said they would not approve any rates that were higher than the JUA. We told the Florida Insurance Department that we didn’t feel the JUA rates were adequate and asked them to provide us with a statement to the effect that the JUA rates were actuarially sound. They refused to do so and told us that we could appeal their decision and it would take about two years to go through the appeals process, etc. What a bunch of sub-cretins!! The other problems carriers face are public adjusters, sink holes and hurricanes every once and a while. Also, does Florida still have their excess profit law? If a carrier makes more than a 5% underwriting profit , they get to give back the amount over 5% to its policyholders? Further, whenever you have an Insurance Commissioner (in any state) that’s elected by the people, there are always problems, because that person is always looking for a higher policical position and as a result, they will make decisions that are great for the voters and bad for the insurance industry. The preceding comments are my opinions and facts, based on actual experience of doing business in Florida. If carriers think things will change, they’re WRONG!!