We already know that the legislature is not going to do anything about assignment of benefit abuse and since it is not reinsurance costs or availability that is driving rate increases, you better get accustomed to double digit rate increases.
I want to suggest the major cause of increased homeowners premiums in Florida and other states is not assignment of benefits or increased reinsurance costs. It’s regulators permitting insurers to “require” homeowners purchase inflated amounts of insurance. Policy terms require amounts of insurance based on the Replacement Cost of a home- the current cost to build a similar structure “but before it has sustained any damage”. Insurers are basing required amounts of insurance on inflated Reconstruction Cost- a worst case scenario estimate of what it might cost to rebuild a structure “after it has been damaged”. Big Difference! Reconstruction Cost is often 30-50% or more greater than the Replacement Cost. That is the principal reason consumers are seeing their home insurance premiums rise dramatically. Read the policy, you will see what I mean.
We already know that the legislature is not going to do anything about assignment of benefit abuse and since it is not reinsurance costs or availability that is driving rate increases, you better get accustomed to double digit rate increases.
I want to suggest the major cause of increased homeowners premiums in Florida and other states is not assignment of benefits or increased reinsurance costs. It’s regulators permitting insurers to “require” homeowners purchase inflated amounts of insurance. Policy terms require amounts of insurance based on the Replacement Cost of a home- the current cost to build a similar structure “but before it has sustained any damage”. Insurers are basing required amounts of insurance on inflated Reconstruction Cost- a worst case scenario estimate of what it might cost to rebuild a structure “after it has been damaged”. Big Difference! Reconstruction Cost is often 30-50% or more greater than the Replacement Cost. That is the principal reason consumers are seeing their home insurance premiums rise dramatically. Read the policy, you will see what I mean.