Property Insurance Choices Vary in Florida Housing Market
The property insurance market remains tight in Florida, but at least consumers are starting to enjoy more choices.
The state Office of Insurance Regulation said Monday it has approved five companies to sell homeowner policies, more proof that Florida’s beleaguered insurance industry is recovering from a wave of recent hurricanes, officials say.
“There’s no silver bullet, no overnight fix,” said Jonathon Kees, spokesman for the insurance regulation office. “But this is definitely a turn for the better.”
Still, these additional insurers won’t do much to ease the insurance crunch quickly for people who might be worried about storm coverage; after all, hurricane season started Friday. And current Florida mortgage holders fear the dangers of the next major storm.
Modern USA Insurance Co. of Clearwater will begin selling coverage in October on homes with an average value of $210,000, while American Keystone Insurance Co. of Ponte Vedra Beach will sell policies on homes valued from $250,000 to $3 million.
Orlando housing market-based Olympus Insurance Co. will begin selling coverage by the fourth quarter of 2007. Plantation-based Privilege Underwriters Reciprocal Exchange Inc. will target homes valued at more than $1 million.
The fifth company, Homeowners Choice Property & Casualty Insurance Co. of Port St. Lucie, will take roughly 10,000 policies in July from state-backed Citizens Property Insurance Co., the state’s biggest property insurer. Many of those policies will be in South Florida, said Francis X. McCahill, president and CEO of Homeowners Choice.
The company will seek new business this fall. In the next two years, it plans to sell 20,000 to 25,000 policies on homes valued from $150,000 to $750,000.
“With the weather being what it is, we’re going to run at this rather conservatively,” McCahill said.
In recent years, many Floridians haven’t been able to find private insurers, and those who did saw prices increase dramatically. To address skyrocketing insurance rates, Florida lawmakers in January passed legislation that allows companies to buy reinsurance at lower costs.
As of June 1, insurance companies were required to pass those savings on to Florida mortgage loan borrowers renewing their policies. Gov. Charlie Crist insisted that the legislation would encourage more competition in Florida, although some critics have argued otherwise.
The five companies receiving state approval are niche players that will be selective in selling policies, said Robert Hartwig, chief economist for the Insurance Information Institute.
“And you can be assured that the price is going to be commiserate with the risk they’re taking,” Hartwig said. “It’s good that there are intrepid companies and entrepreneurs to put their capital at risk in the state of Florida.”
SOURCE: The Sun-Sentinel
