The Florida's residential property insurance market is going through a bad phase as property insurance rates are at their historic highdue to a number of factors responsible for the current crisis.
The Florida's residential property insurance market is going through a bad phase. Property insurance rates are at their historic high in Florida. There are a number of factors responsible for the current crisis, including multiple hurricanes and tropical storms in last many years together with the reactions of certain private insurers. To add to the problem, in the recent past, insurers have increasingly indulged in a growing trend of policy cancellations and non-renewals. All these factors have restricted the availability and affordability of residential property insurance resulting in a dramatic rise in the price of such insurance.
Although Florida's property insurance market is still struggling, more choices have started to become available to consumers. The news on Sun-Sentinel.com reported approval by the state Office of Insurance Regulation of five companies for selling homeowners policies, which is further evidence of a recovery of Florida's ailing insurance industry from a spate of hurricanes that recently hit the state.
The homeowners' insurers comprise Olympus Insurance Company; Modern USA Insurance Company; Privilege Underwriters Reciprocal Exchange Incorporated; Homeowners Choice Property and Casualty Insurance Company; and American Keystone Insurance Company. National Underwriter news published a statement by Insurance Commissioner Kevin McCarthy "These new companies not only provide much needed investment to our marketplace but demonstrate the commitment of the industry to continue to conduct business in our state".
Last some years have proved difficult for many Floridians to get private insurers; those who were successful saw insurance cost increasing radically. In order to combat escalating insurance costs, Florida lawmakers came up with legislation in January permitting lower cost reinsurance for companies. The five companies who were granted approval from state are small players who will be selective in selling insurance policies. In news published on Sun-Sentinel, Robert Hartwig, chief economist for the Insurance Information Institute, said "It's good that there are intrepid companies and entrepreneurs to put their capital at risk in the state of Florida."
A research analyst at RNCOS feels "As the season for 2007 hurricane is coming nearer, there is a vital need for property insurance to become and remain more available as well as more affordable. Therefore, emergency action is essential for the immediate protection of public welfare. This would ensure market stability, prevent the prevailing crisis from getting worse and rule out the possibility of rate increases, without undue impairment of the ability of insurers to carry on with their business".
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