John's Florida Real Estate Blog

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60.000 Nationwide Customers to Lose Property Coverage in Florida Starting in July 2010

First it was the "good hands people" who used those hands to wrap them around our throats. Then it was "the good neighbor people" who cried poverty and fled Florida, getting concessions from the state along the way and dragging their feet when asked to supply the Florida Office of Insurance Regulation with needed documentation.

Now, it is the people who "are on our side" that are running for the border. My insurance agent told me, and news reports I am seeing and hearing seem to support, that Nationwide Insurance is going to drop 60,000 homeowners policies throughout the state of Florida, starting in mid-2010. Of course, like with the other "big boys" they will still be happy to continue to take your cash to cover your car and boats! Talk about "cherry picking".

They said that the Tower Hill Group would pick up at least some of these policies. However, when I talked to my agent he said that Tower Hill was only insuring homes worth over $300,000! Now, that may have changed. I hope so, or a lot of Floridians will be left out in the cold and searching for coverage.

Of course, the state-run company, Citizens can fill the gap, but their coverage and prices are generally not as good as what the private companies can offer.

Nationwide says it will start notifying homeowners of the non-renewal of their policies in July 2010. So what are you supposed to do in the meantime? Wait over a half a year to see if you are or are not allowed to stay with Nationwide??

I feel sorry for the agents that handle Nationwide customers. Now that homeowners know that they "might" lose their coverage, many may start looking for other coverage and cancelling their current policies now. When State Farm left, agents sent out notices telling people not to worry since they still had coverage until ______ when their policy would officially be cancelled. They probably did this because they did not want to lose months of premiums when owners would not wait for the axe to fall, but went ahead and moved to a company that was staying in Florida. If I were the independent agents I would probably do the same thing. Sounds a little like the GM dealerships that got the rugs pulled out from under them several months back. They worked hard and got dumped on. Customers were scared and wary of GM products.

But can you blame the homeowner who may, or may not, have any property insurance come next summer? Would you want to wait until the last minute when you get that cancellation letter? At that point, everyone will be scurrying to find coverage before those companies that are continuing to underwrite fill up their quotas.

Logically, these companies do not want to concentrate all of their policies in one zip code area or a localized storm could wipe them out. So they have limits as to the number of new policies they will write in an area. Instead, they do so many in 33541, then so many in 33542, then so many in 33525, etc. That way they are spreading out the risk. So if you wait too long, you could be shut out with Citizens being your only option.

Three weeks ago my agent did say that he had 4 companies writing in the mobile home parks here, especially the 55+ subdivisions. He said the number of companies writing policies decreased with the age of the home. That always seems to be the case. Insurers like newer homes of any kind as opposed to older ones. That I understand and accept. Very old homes or mobiles often have only Citizens as their option.

Since we are almost through the 2009 hurricane season with no storms hitting us, if we can get through it unscathed, I am hoping that in January 2010 more of the little companies will start to write policies here and give us more options. Especially for those who are with Nationwide. I am certainly going to check in the new year to see if I can get a cheaper policy!

It never hurts to check every few months or so to see if something is better out there. If you get stuck using Citizens, check with your agent (or another one) in a few months to see if things have improved.

This post is my opinion as a Floridian. It is also my hope that these small companies that come in to give us coverage have many years with no major storms in Florida, and that they make a fortune for not "turning tail" and running for the border. Loyalty deserves some reward in my book.

I have a very small house, just 660 sqare feet of living space with a 300 sqare foot garage. Built in 1979, so not ancient. No claims ever. Worth well under 100K, but my insurance payment is $1,568/year!! Just went up again. So I feel the pain right along with the rest of you. As I said, after January 2010 I am going shopping for a better rate.

If I can assist you in any way, feel free to call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com  You can also visit my webpage at: www.jelwell.century21bnr.com

John Elwell - REALTOR

CENTURY 21

Bill Nye Realty, Inc.

813-783-4444

Licensed in Florida

 

Comment balloon 2 commentsJohn Elwell • October 11 2009 02:56PM

Comments

John, This happened here in Houston a few years ago with Allstate.  We are now with Nationwide (YIKES). 

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 10 years ago

Yep  Marchal, and they form these little in-state companies like Allstate Floridian. So when a storm hits they cry poverty. No matter that Allstate Minnesota raked it in. I had always thought that the idea of insurance was to spread the risk over the broadest number of people. That way you had a lot of people paying into the company without claims and just a limited number who had claims.

Why can the little companies make money, but the big boys can't???? Just my opinion, but I believe if you do not write homeowner policies in the state, you should not be able to do cars, boats, health, etc. In other words, cherry pick. Or perhaps, you should have to have at least 50% of your portfolio in homeowner policies. Or some other reasonable amount. But the insurance lobby is just too big.

As I said, I hope we have several good  years with no big storms and the small companies that are taking up the slack willl make a ton of money! That would be great.

Posted by John Elwell, You Deserve a Full-Time Agent, Not Reduced Results (CENTURY 21 Bill Nye Realty, Inc.) about 10 years ago

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