Saturday, January 26, 2013

Policy for the PBay council to consider for the 2013 legislative agenda. Work to guard against the re-establishment of the arbitrary property insurance line.

Protection of homeowner’s insurance is a legislative issue that needs some advocacy to ensure that we do not slip bad into even darker days of homeowners insurance. Property/windstorm insurance is an issue you need to watch each and every year.

There are two main issues:

1 The credits that are being lost through the sudden re-inspections that Citizens has been requiring. Have you received your letter in the last two years? It seems as if Citizen's has been doing their best to take the premium saving credits away.  The homeowners of Palmetto Bay need advocacy to prevent such tactics. Some argue that this is nothing more than a backdoor rate increase through removal of the discounts.  This makes homeowners insurance less affordable and its those who can afford it least.

2. Solving an "unresolved problem" of too much exposure - by redefining the mission of Citizens.  

I hope that we are not suffering from institutional amnesia due to the change in leadership. Homeowners insurance is the largest cost to area residents, exceeding property taxes.  Maybe people are starting to forget how much sudden rises or availability of property insurance affects our property values or even if we can get a mortgage. The original Palmetto Bay council took this issue seriously and always monitored the homeowners’ insurance issue. 

Check out the article posted online, Miami Herald: Senate committee hears concerns about Citizens, posted Jan 23, 201, by Brent Kallestad, Associated Press, reporting that:

A number of unresolved problems haunting the state-backed Citizens Property Insurance Corp. have left the state increasingly vulnerable to catastrophe, the chairman of the Senate Banking and Insurance Committee said Wednesday.

Sen. David Simmons, R-Maitland, said it's time to redefine the mission for Citizens, created a decade ago as the insurer of last resort.
(emphasis added)

Citizens' instead has grown into the largest property insurer in Florida with more than 1.3 million customers, roughly one-fourth of the total market in the state. The company's growth has resulted in part from artificially low rates.

"We haven't solved the problem," Simmons said during a two-hour, late afternoon hearing. "Any cataclysmic event would have cataclysmic results in Florida."

Virtually all Floridians carrying insurance, whether or not a Citizens' customer, would be liable to make up any shortfall in the event of a catastrophe. Any shortfall in the Florida Hurricane Catastrophe Fund, often known as the CAT fund, would also be made up from emergency assessments.

Code words?
"Redefine the mission"? Ut oh, I think this is all starting to sound like potential code words that we need to dump the expense of coastal insurance back onto those living east of I95 and US1.  Sure the legislators from Central and North Florida will take our tax dollars (their revenue) and distribute them statewide (mostly to benefit central and north Florida), but they want to forget that Florida is a peninsula with nearly 1,200 miles of coastline.  We are all in this together and the 'easterners' should not be cast off from being part of the Florida joint risk come insurance coverage time.

Will such a dramatic and unfair change in insurance happen in this legislative session? It is faintly possible, but certainly not probable. The issue is whether it would happen if those who want to cast the cost of windstorm insurance back onto those living east of US1 stick their toes in the legislative water and find only lukewarm, or worse, no opposition. 

Working the issues important to home affordability.

Palmetto Bay once really worked the issues, not just passed paper stating general intention.  See Palmetto Bay tries to tackle the 'gorilla' of insurance, posted online, re-posting the original article by then Herald reporter Kathleen Fordyce of Nov 17, 2006.  Or Officials Plan to push for storm insurance reform, by then Herald reporter Yudy Pineiro, detailing how Councilman Ed Feller, with the backing of State Rep. Julio Robaina, worked the state Legislature to consider windstorm insurance reform in its 2006 session.

I have provided links to two resolutions (November 1, 2004 and December 5, 2005) that demonstrate the extent that the original council advocated for area residents. I ask this current Palmetto Bay council to continue the vigilance over this key home affordability issue. 

The arbitrary line, gone, but not forgotten (and looked at as the good old days for those west of it):

Founding council members Linda Robinson and Dr. Ed Feller understood the importance of this issue and we all worked together as a cohesive unit with our local representatives in Tallahassee on the windstorm issue. 

Where was the "arbitrary line"?

Please take the time to read the Palmetto Bay council minutes for the November 1, 2004, council meeting (CLICK HERE).  Founding councilman (reminder taken verbatim from the minutes:)Feller explained the matter, noting that a line was drawn wherein all properties east of Dixie Highway and east of I-95 would require windstorm coverage. He stated that he believed this invisible line was “grossly unfair” and “arbitrary” as it determined how much people would have to pay for windstorm insurance; and the arbitrary line should be eliminated. He noted that many residents who have windstorm coverage made changes to their homes in order to get lower rates and have now discovered that the reduced rates were eliminated. Councilman Feller stated that he would like this matter reconsidered so that the reduced rates could be offered on improved homes.
* * *
Discussion ensued.

 Who stands to lose? The South Dade area would get hit hard.

Yearly vigilance and aggressive action is required each year or we could all be wondering what happened as we are writing those much bigger checks for homeowners insurance or worse, trying to sell our homes at a discount to buyers who can write those checks.

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