	Article Directory		Article Submission Service		Article Marketing Blog		Publishers		Member Log In

Article Directory :: Finance & Investment Articles

Why You Shouldn't Hate All Florida Home Insurance Companies

By Michael Letcher

Republish: EasyPublish™
Published: 23Jan2009
Word count: 594
Viewed: 273 time(s)

Get Free Content For Your Site

Hating Florida homeowners insurance companies has become a very popular pastime. After all, many well known national companies started leaving the state after Hurricane Andrew and that trend has continued through today. After the Florida hurricanes of 2004 and 2005, more companies continued to dramatically increase both their prices and their home insurance cancellations.

But there are now two distinct groups of home insurance companies in Florida. The first group of companies consists of well known national names such as State Farm Florida, Allstate Floridian, and Nationwide Insurance Company of Florida among others. The second group consists of Florida based regional companies that have started doing business in the state over the past 15 years - many since the end of 2005.

In this new era of national companies leaving the state and new companies entering the market, it is the second group of newly formed companies that we should be cutting some slack. Here's why:

After the 2007 legislation, it was the recently formed companies that actually reduced their rates in response to this legislation while many of the national companies stubbornly pursued rate increases.

It is the newer companies that are continuing to write new business in Florida while the long established national companies continue to drop and cancel Florida home insurance policies.

The Florida based start-ups are more willing to consider insuring older Florida homes and properties near the coast - risks that the national companies abandoned years ago and continue to shed.

Finally, these newer start up companies deserve a chance to build up their capital reserves and to expand responsibly. They are our future if there is any hope of Florida taxpayers and policyholders avoiding massive special assessments that we could face if Citizens Property Insurance Corporation or the Florida Hurricane Catastrophe Fund ever come up short.

Some of these newer companies have started to expand their risk both in Florida and into other states. This risk diversification is a good thing that will reduce the chances of one particular company going broke after a major hurricane.

Finally, from a policy perspective, the State of Florida needs to take a new look at how it considers request to increase rates. At the present time the system is not working property - the larger companies bailing out on the state are still getting higher rates or smaller decreases than the newer companies that are taking more and more of Florida's hurricane risk.

Companies that can demonstrate that they are growing their policy base and those that can show a track record of covering older and coastal homes should be permitted more pricing power and granted higher rate increases than the companies that are bailing out.

This is not to say that the newer companies are perfect. They have opportunities to improve too - especially in the area of customer service as they try to operate with leaner staffs and to take advantage of pooled customer support centers.

However, the next time you are in a conversation where general hatred is being aimed at Florida home insurance companies don't paint all of the companies with the same brush. Many of the newer companies are covering your higher risk homes, taking steps to reduce costs and your premiums, and assuming risks that used to be part of Citizens Property Insurance Corporation.

Give these newer start-up companies credit for helping all Floridians out during difficult times. The more of these companies that can be created and built up with a decent base of premiums and capital, the better it will be for all of Florida in the long run.

Michael Letcher is a former Bank of America and W.R. Grace executive and a licensed Certified Public Accountant. His on-line guide can help you find affordable Tampa home insurance. Get all the secrets to low cost Florida insurance in his free newsletter at => http://www.homeinsurancebuyers.org

EasyPublish™ this article - publishers click here