...and the insurance "fiasco" continues!!

[Ixolib]

By TOM ZUCCO, St. Petersburg Times Staff Writer
Published August 16, 2006

Eventually, state will fund upgrades

Ted Gembicki did exactly what state officials and the insurance industry want most Floridians do. He bought aluminum storm shutters and had the garage door reinforced on his modest Spring Hill home last month at a cost of $5,225.

Armed with photos of the work, he asked his State Farm agent for a break on his homeowner's premium. For his efforts, his agent told him, he would get a 5 or 10 percent discount. The extra $100 wasn't much, said Gembicki, 62, but it was something.

The check he got last week: $16.11.

"Maybe I'll buy a pizza," he said.

Gembicki's case illustrates what could be a serious flaw in the state's new mitigation program, which took effect Tuesday, to encourage residents to harden their homes against hurricanes.

The law, which offers matching state funds of as much as $5,000 for improvements that fortify a home, also requires insurance companies to offer incentives for such fixes. But the law doesn't include a specific financial obligation on insurers to reduce premiums.

According to the statute, all the companies are required to do is offer homeowners "discounts, credits or other rate differentials".

Sometimes, that can amount to very little.

Insurance companies offer discounts for those who harden their homes in a wide range - from up to 39 percent for State Farm and 33 percent for Citizens, to just 3 percent for Nationwide.

But the discounts fluctuate dramatically depending on the age of the home, its construction, location and insured value.

At a Cabinet meeting Tuesday in Tallahassee, Insurance Commissioner Kevin McCarty said the percentage of the discount will be based on just the wind portion of a policy, not the total premium.

But again, that can vary. In Florida, the wind portion of a premium represents between 15 and 70 percent of the total cost, depending on location.

Gov. Jeb Bush acknowledged Tuesday the amount of a discount is a key part of the highly touted mitigation program.

"If the discount is 5 percent, I'm not interested," Bush said. "If it's 30 percent, now you're talking."

Officials from State Farm Floridian and Allstate Floridian expressed support for the program at Tuesday's Cabinet meeting.

"It's in everyone's best interest to do it," said Joe Formusa, a State Farm vice president who also was appointed recently to the governor's insurance technical advisory committee.

But no one could say how much of a discount policyholders will receive.

Tom Gallagher, the state's chief financial officer who is running for governor, said each homeowner who receives an inspection report will also get a breakdown of how much will be saved on their insurance premium. That figure, Gallagher said, will be based on how much work is done.

But that leads to yet another potential problem: too many homeowners and not enough time or money. The state hopes to have 12,000 homes inspected in the next 12 weeks, and another 50,000 inspected next year.

But there are roughly 4.2-million homesteaded properties in Florida, and by noon of the program's first day in business, the state had received more than 2,000 applications.

As part of legislation passed in May, the state set aside about $250-million to fund the matching grants program over a three-year period. Bush, who leaves office in January, said state statutes should be changed to allow the program to continue beyond 2008.

While it remains to be seen how much the state will have to spend on matching grants, some homeowners say they already know not to expect much from their insurance company.

Roberta and Fred Hosken spent nearly $300,000 earlier this year to hurricane-proof their home near Largo, which has an estimated value of more than $2-million, according to the Pinellas County property appraiser's Web site.

Looking to save on their nearly $12,000-a-year property insurance bill, they hand-delivered the receipts to their Nationwide agent.

The discount they got on their $300,000 improvement: $400.

"We asked them what more we could've done," Roberta Hosken said. "It just didn't matter."

But that wasn't the worst cut.

The couple got a letter two weeks ago telling them that as of Nov. 10, Nationwide was dropping their homeowners policy.

"And they asked us," Hosken said with a chuckle, "to please consider them for our car insurance."

Tom Zucco can be reached at zucco@sptimes.com or 727 893-8247.

[HurriCat]

I'm starting to see the other side. Let's see, a 2,300,000 dollar spread in a known high-risk area being covered for not even $12,000 a year? Yeah, the companies are sort of on the short end - especially in a state like Florida. For me, our insurance is still under two thousand a year, but considering that this will replace my home if lost - again, not a bad deal at all. It's hard for me to put up with a lot of whining - especially when the people in this article put about three times the value of MY home into hurricane protection alone.

[Ixolib]

I hear 'ya, and yes, I agree that the opulent-minded folks on whom this story was written are significantly more invested than most of us. However, the point remains in that they invested $300K in improvements to better weather a hurricane and then received only $400 in discounts - or about .13% of their investment.

So, relatively speaking, if us "poor" folks invest, say, $10,000, our discount would amount to about only $13.00 - give or take a few cents.

Therefore, the fiasco is alive and well.....

[MGC]

I'm not doing a darn thing to fortify my house against the next hurricane. Unless my policy demands that I do certain things I'm not going to do squat. After the way insurance companies have treated people down here I hope they all go bankrupt. Why should I do anything to reduce an insurance company potential risk exposure?.....MGC

[Alladin]

Unfortunately the article did not say where the Hosken’s house is located or tell us its age or its construction so we have no idea if their house hardening was justified or worthwhile. If, for example, the house has a tile roof or is in a high risk area then their money was not well spent. Since Nationwide is dropping their policy in November, I suspect they are in a high risk area.

[Ixolib]

I'm not doing a darn thing to fortify my house against the next hurricane. Unless my policy demands that I do certain things I'm not going to do squat. After the way insurance companies have treated people down here I hope they all go bankrupt. Why should I do anything to reduce an insurance company potential risk exposure?.....MGC

And I'll second THAT!!!

Why bother since the only thing that "really" messes things up anyway is surge, and for that there IS no protection - except flood insurance, which I now have (sigh....).

And the insurance companies don't have to worry themselves with that issue, as we have all recently found out...

[CajunMama]

And i thank the two of you when i don't have a claim and cannot afford insurance because of the payouts to those who choose not to protect their homes.

[Lindaloo]

I know I am going to continue to protect mine, regardless. If you live near water it is a no brainer to buy flood insurance. I am 2 miles inland and I have flood, which I have had for quite a while.

There are alot of people who actually had flood, but all they had left were slabs. You can't determine which did what, especially when you can't find anything that belongs to you.

[CajunMama]

Linda, I'm the same here. I'm 25 miles from the coast and I have flood insurance. Rita's surge came within 10 miles of me. I know that because we drove out to Erath and saw where it ended. It might even have been closer than that because i measured by the roadways.

Anyone living along the coast should have flood insurance regardless if they're in a flood zone or not. I'm not in a flood zone and i have flooded when i was not covered by flood insurance. My wise neighbor once told me, "It should be mandatory for everyone living south of I-10 to have flood insurance".

[Lindaloo]

I agree with you about everybody living south of I-10. Here, that is exactly who flooded was all of us south of 10 and those living near the Escatawpa, Pascagoula and Dog Rivers. Bluff Creek flooded homes in Vancleave well north of 10. Katrina surge would have probably reached your home Kathy. Scary thought!

I can understand why some did not buy flood south of 10 because they were so far from the beach, at least here anyway. But, if you live a block or two from the Gulf of Mexico, buy the flood. Most of us got caught up in the Camille mindset. I do happen to know that there is a record number of new flood policies being written, most of those are coming out of Mississippi.

Guess what? I am still not zoned for flood. lol.

[DanKellFla]

I am not zoned for flood, but for $350 a year, flood insurance for me was too cheap to pass up. I live on a lake. Although it has withstood some incredible rain events well, I thought the piece of mind was worth it.
I had a friend of mine who had a plumbing problem that wasn't covered by his regular home owners insurance. But he had flood and it covered everything. Just out of curiosity, what does flood insurance cost for some of you?

As for insurance discounts, I think we should be able to get a straight answer on how much an improvement is going to really save us. I hear a lot of talk about hight percentage discounts, but have never met anybody who actually got them.

[Lindaloo]

I am now paying 235 a year for flood.

[Ixolib]

As for insurance discounts, I think we should be able to get a straight answer on how much an improvement is going to really save us. I hear a lot of talk about hight percentage discounts, but have never met anybody who actually got them.

Good point . Which is exactly why I started this thread in the first place!!

As for costs, flood insurance on my home in Biloxi, which WASN'T flood-insured for Katrina (not in a flood zone!!) is about the same as yours. Of course, I now have flood insurance. Hindsight and all!! Our home there took 3 feet of wind-driven surge in Katrina.

I, like so many others, had no flood insurance because:
a. The mortgage company didn't require it.
b. The city didn't recommend it.
c. The county didn't recommend it.
d. The federal government (FEMA and Friends) didn't recommend it.
e. My insurance agent (SF) didn't recommend it (in fact advised against it).
f. We did NOT receive any surge in Camille (our "old" benchmark).

If I had known then what I know now - both in terms of what Katrina would bring AND in how cheap the flood insurance is - my savings would be about $70,000 healthier...

[Alladin]

I am not zoned for flood,

Guess what? I am still not zoned for flood. lol.

Everyone lives in a flood zone. It’s just a matter of whether you live in a low, moderate or high risk area.

[Lindaloo]

I understand where you are coming from with the A thru F. I believe most of that (especially the Camille Boomers) relied on that storm surge theory.

I PRAY we never see another storm like that one again. But, you will have great piece of mind when you do leave that you are properly insured. And you need to check your policy. You may not have enough coverage or you may not have enough insurance. My boss just found out she did not have enough insurance on her home. She only had 200,000 on the dwelling. She should be insured for 600,000. The home appraised for over a half million. Oh BTW, she lives in north Mobile County, Alabama in a little country town named Citronelle, well away from any type of surge. Her insurance company dropped her whole policy for one claim due to Katrina. How sad is that?! She lives on 30 acres and is sitting on a hill.

[Lindaloo]

I am not zoned for flood,

Guess what? I am still not zoned for flood. lol.

Everyone lives in a flood zone. It’s just a matter of whether you live in a low, moderate or high risk area.

How do you figure everyone lives in a flood zone? LOL! No, they do not. And to answer your question, no... technically they have me in the low risk zone. I am assuming that everybody that lives 20 to 30 miles inland, in the country, not near any bodies of water, are in a flood zone? Okie Doke.

[Alladin]

I am not zoned for flood,

Guess what? I am still not zoned for flood. lol.

Everyone lives in a flood zone. It’s just a matter of whether you live in a low, moderate or high risk area.

How do you figure everyone lives in a flood zone? LOL! No, they do not. And to answer your question, no... technically they have me in the low risk zone. I am assuming that everybody that lives 20 to 30 miles inland, in the country, not near any bodies of water, are in a flood zone? Okie Doke.

What are flood zones?
Flood zones are land areas identified by the Federal Emergency Management Agency (FEMA). Each flood zone describes that land area in terms of its risk of flooding. Everyone lives in a flood zones - it's just a question of whether you live in a low, moderate or high risk area.

I don't make this stuff up....FEMA does.

[DanKellFla]

Ha!

"ORLANDO — As state officials prepare to spend $250 million to help Floridians hurricane-proof their homes, they're also pushing insurers to simplify the discounts they offer for upgrades, and perhaps make those breaks more generous."

........
http://www.palmbeachpost.com/business/c ... _0825.html

[Lindaloo]

Everyone lives in a flood zone. It’s just a matter of whether you live in a low, moderate or high risk area.

Well Alladin, you said that everyone lives in a flood zone. I was just replying to that statement. If you are going to correct someone, please be more specific. Thanks.

[Alladin]

Everyone lives in a flood zone. It’s just a matter of whether you live in a low, moderate or high risk area.

Well Alladin, you said that everyone lives in a flood zone. I was just replying to that statement. If you are going to correct someone, please be more specific. Thanks.

According to FEMA, we all live in a flood zone. Some zones are higher risk than others.

http://www.floodsmart.gov/floodsmart/pa ... nes.jsp#A1