By Louise Bolger
Don't let insurance blues get you down
sun staff writer
Whoever would have thought a few years ago that the endless
discussions about overpriced properties and staggering tax
bills would be usurped by constant talk about the rates to
insure those very properties. For decades, Florida homeowners
merrily rolled along never paying too much attention to their
insurance premiums. Why should they? Aside from small annual
increases, nothing much changed. Then came the 2004 and 2005
hurricane season and the insurance world blinked.
We have all heard the stories. Policies being cancelled, homeowners
needing to go into Citizens the state run insurer of last
resort, premiums increasing 100 percent and more, private
insurers asking the state for permission to raise rates to
unheard of levels, and all of this on top of a slow down in
the real estate market. Before you decide to drive your car
off a cliff or move to Boise, Idaho, there are things homeowners
and citizens that can do.
First of all, calm down. Insurance premiums have always functioned
under free-market principles, and there is a school of thought
that the market will eventually correct itself. Of course,
having a few hurricane-free years might help the market achieve
this goal faster and with a lot less pain. To support this
theory, it is frequently pointed out that after 9/11, insurance
costs spiked nationally but eventually subsided.
Become an activist, start writing letters and e-mails to your
state and federal representatives, organize friends and neighbors
to do the same, and keep informed about pending legislation
that could help the situation. Some legislators feel federal
intervention may be necessary; others feel that property insurance
has always been the responsibility of the states and should
stay that way. One of the bills introduced by Sen. Bill Nelson,
a former state insurance commissioner, has proposed a federal
catastrophe fund to pay claims after the state catastrophe
fund pays out large sums, something that residents of other
states probably would not support. Naturally, vote to help
make sure the candidate you feel best represents your best
interests gets into office.
How about considering self-insuring, a decision that some
Anna Maria Island homeowners have already made. Obviously,
this is not a solution for everyone, but if you dont
have a mortgage on your home and the value of your land is
far greater than the value of the structure, it could be something
to think about. Of course, the replacement cost and/or repairs
from a hurricane would be your responsibility, a risk that
you must be willing and able to accept.
And how does this all tie into the value of your home? The
only solace you may find is that people who want to live on
or near the water whether its Anna Maria, Fla;
Charleston, S. C.; or Long Island, N.Y. are all facing
higher insurance premiums for the privilege of doing so. Just
like property taxes, if youre moving from an area with
already high taxes, Florida doesnt look bad at all.
So brace yourself when the insurance bill arrives, but instead
of feeling helpless, be proactive. It may not change the numbers
at the bottom of the bill, but it will make you feel better
and keep you from moving to Idaho.