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Sha'Ron James

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Storms, water claims shake insurance market - but Post guide can help


Date: January 23, 2017
Source: Palm Beach Post
Author:  Charles Elmore


Close to one in four property insurance policies in Palm Beach County was canceled or not renewed last year as hurricanes returned to Florida’s skies, the clamor over water-damage claims grew louder, and many homeowners were left flailing in a sea of new or unfamiliar insurance company names, state records show.

The good news: The updated Palm Beach Post property insurance guide is available today to help consumers.

The exclusive and free online guide offers multiple financial safety ratings on more than 100 companies operating in the state, along with data crunched by the newspaper to show which insurers generate the most complaints.

The guide also provides company contact information to help homeowners shop around.

That is becoming a more urgent concern as premiums, which were falling a couple of years ago as global reinsurance costs eased, have begun to rise again in a state that already grapples with the nation’s most expensive property insurance bills.

“People are shopping more because prices are changing,” said Roger Desjadon, CEO of Florida Peninsula Insurance Co. in Boca Raton.

He says his company and sister firm Edison Insurance Co. have been adding customers lately in Palm Beach County, but others have announced they are dialing back.

As 2017 begins, Florida digs out from its first brushes with hurricanes in more than a decade, Hermine and Matthew. Between them, they kicked up more than 130,000 claims and insured damages of more than $950 million.

The damage could have been worse if storm paths and intensities had changed slightly, but that is not the only thing roiling the market.

Insurance companies continue to sound the alarm about what they call inflated claims in South Florida for damage not caused by catastrophic storms. They blame contractors, attorneys and other third parties who get consumers to sign over control of insurance benefits, then jack up costs of claims such as water damage from a plumbing leak.

“Florida-based insurers are in the best financial condition in more than a decade and are prepared to handle all legitimate claims,” said William Stander, executive director of Florida Property & Casualty Association. “Unfortunately, the system is being gamed by some law firms and vendors who are lining their pockets at the expense of homeowners.”

Contractors, adjusters and attorneys are pushing back, accusing insurers of trying to wriggle out of full and fair payment, as state legislative committees huddle to consider possible solutions during a session that starts in March.

Florida insurance commissioner David Altmaier called loss trends “concerning” before a state Senate panel this month, with insurance companies “looking at zip codes and certain regions of the state” to “start turning them off for new business.”

Property insurance companies canceled or did not renew more than 115,000 policies, or about one in four, in Palm Beach County in the 12 months ended Sept. 30, 2016, a state database shows. That includes commercial and rental properties and does not necessarily mean companies initiated the break-ups in every case, but it points to plenty of consumers looking for new policies for one reason or another.

State-run Citizens Property Insurance Corp. expects to reverse a years-long trend and add customers statewide in 2017, pushing back above 500,000 policies. Citizens shed about 1 million policies between 2012 and 2016 as private competitors snapped up its customers, mostly through state-approved mail offers.

Now offers from private companies to take Citizens customers are slowing down, even as Citizens policyholders are getting choosier about taking them.

Consider offers state regulators approved for February. They include Avatar Property and Casualty Insurance Co. (10,899 offers), Safepoint Insurance Co. (15,000) and Southern Oak Insurance Co, (15,000).

At a meeting last month, Citizens officials said they expect as few as 10,000 customers to say yes.

Not only price but also service could be at issue, as some of Florida’s relatively small and unproven private companies are beginning to get tested under storm conditions for the first time.

A Citizens official read a letter in meeting last month from a customer grateful for the company’s prompt response to hurricane damage, saying many neighbors were unable to make contact quickly with private companies. The letter brought up a car insurance commercial where a customer says, “Maybe you have the wrong insurance company.”

Biggest insurers in Palm Beach County

Company /Policies

1. Universal Property & Casualty Insurance Co. 70,754

2. Citizens Property Insurance Corp. 47,471

3. Federated National Insurance Co. 34,612

4. Heritage Property & Casualty Insurance Co. 20,689

5. Homeowners Choice Property & Casualty Insurance Co. 19,711

Source: Florida Office of Insurance Regulation as of Sept. 30, 2016

Help is here

See which companies have the strongest financial ratings and fewest complaints in the updated Palm Beach Post Property Insurance Guide: