Florida’s home insurers hope the public doesn’t blame them as they implement rate increases, initiate coverage changes and nonrenew policies.

They say they have no choice after the Florida Legislature for the fifth year in a row failed to address the crisis in water damage claims abuse.

“We keep saying help us try to solve this problem,” said Michael Carlson, president of the Personal Insurance Federation of Florida.

Since lawmakers reneged on enacting reforms, insurance carriers are now taking matters into their own hands and the state’s regulator is warning consumers to be prepared.

“We will continue to see homeowners’ insurance companies raise their rates for our consumers in a best-case scenario, and in a worst case scenario just simply stop offering their products in certain regions of the state,” Insurance Commissioner David Altmaier told the Florida Cabinet last month.

Altmaier said that worst-case scenario has the potential to “undo a lot of the great work” that has been done in depopulating the state-run insurer of last resort, Citizens, which has taken the brunt of the abuse, particularly in South Florida.

“This remains one of our number one priorities on the property and casualty side,” Altmaier said.

He was referring to escalating assignment of benefits (AOB) abuse from unlicensed water remediation and roofing contractors working with attorneys to cash in on a homeowners’ insurance policy for water damage claims. The problem has begun to spread to other segments of insurance, with auto glass claims using AOBs also on the rise.

The Florida Department of Financial Services has stepped up its abuse investigations. Former Florida CFO Atwater told Insurance Journal in May before he left office that the DFS is counting on the industry to alert it to any abuse it sees happening.

“This is a real financial crime. These people are making money off of these really exploited AOB claims –it is just sophisticated robbery from thousands of people who are having to embed that cost in their next premium payment. It is real,” Atwater said.

Insurance carriers say the marketplace has no choice but to respond by moving to cover the costs.

They are raising rates for homeowners’ policies across the state but say that is not enough after several years of the unchecked AOB abuse. So they are also appealing to the Florida Office of Insurance Regulation (OIR) to be able to do more.

“AOB will ultimately be addressed by the marketplace if lawmakers don’t do anything. The question is how harmful is that to a policyholder that isn’t out to cheat an insurance company – and it is harmful,” said Scott Johnson, who has worked on insurance issues for 40 years and currently runs his own consulting firm, Johnson Strategies. “AOB is the worst crisis I have seen.”

Citizens led the pack in lobbying for reform this past session, warning Florida lawmakers that without it the insurer’s policy count will start to climb again after years of depopulation efforts, and that homeowners could expect to see statutorily allowed rate increases of up to 10 percent for the foreseeable future.

Last month the warning became a reality when Citizens announced it would seek an overall statewide rate increase again this year, citing AOB as the reason.

Citizens also said it would submit a series of policy changes to the OIR that it hopes will reduce claims costs for nonweather water losses.

Among the major policy changes is a $10,000 cap on water loss repairs for customers who decide not to participate in Citizens’ Managed Repair Program.

Other policy changes include expanding obligations to third parties that accept an assignment of benefits. Currently, contractors who accept an assignment are not bound by the same obligations, including allowing Citizens adjusters to inspect a claim in a timely manner or providing proof that a loss has occurred.

“We were hoping for legislative change and a surgical solution,” said Barry Gilway, Citizens president/CEO and executive director. “Given that this did not occur in 2017, we cannot wait for the trends to worsen and take no corrective action.”

Commissioner Altmaier told the Cabinet that OIR is discussing changes to policy forms “in an attempt to curb what we believe are an unacceptable rise in costs in this market.”

Many insurers in the state are watching and waiting to see what happens with Citizens proposals, and will base their own requests to OIR on what is approved for Citizens.

“We will see further rate increases being filed [by insurers]. But as far as doing their due diligence as an insurance company, they will pursue whatever avenue they can get,” said Logan McFaddin, regional director for the Property Casualty Insurers Association of America (PCI).

Managed Repair, Preferred Vendors, Premium Discounts

Citizens is already employing one strategy – a managed repair program that provides its policyholders with free water extraction and drying services if they have a nonweather-related water loss. The Citizens Managed Repair Program also includes access to a network of licensed contractors through Contractor Connection. Policyholders can use the network to find a contractor to repair damage to its pre-loss condition with repairs guaranteed for a minimum of three years.

Citizens policyholders who do not want to use the program can hire their own contractors to do permanent repairs, but reimbursement may be limited to $10,000 starting in 2018, if approved by Florida regulators.

Other companies are exploring managed repair or preferred vendor programs as well.

Castle Key Insurance Co. and Castle Key Indemnity Co., Allstate Insurance subsidiaries that write about 2 percent of Florida’s homeowners market, offer preferred vendors to customers in the event of a claim.

“Who the customer chooses to work with on repairs is entirely their decision, however we do make vendors available if the customer does not have a contractor of choice,” said Cathy Mayo, Allstate Florida Region’s Field Corporate Relations manager.

“Preferred vendor programs are definitely helpful because an insurer is not going to use a vendor that turns around and sues them – it gets rid of that motivation to have an attorney enter the agreement,” said PCI’s McFaddin. “Other insurers could follow what Citizens does if they can make headway with OIR.”

In a statement to Insurance Journal, OIR said it wouldn’t comment on the Citizens filing, but anticipates that a public hearing will be held for Citizens annual rate filings, “where this issue may be presented in more detail by the company.”

OIR did say that it has approved some managed repair programs for other carriers in the past as allowed under Florida statutes, but hasn’t seen any new filings recently.

Those outside the industry – including public adjusters and law firms – have voiced opposition to such programs, saying they restrict policyholder rights.

Johnson says that response is not surprising.

“Guess I would say that too if I was a public adjuster or trial attorney. What is fair to them is something that inflates the claim by at least 20 percent because that’s how they get paid. What’s fair to an attorney is if there is a controversy. They need the conflict because that’s how they make their fees,” Johnson said.

He noted that more than half of water losses have been handled by firms that don’t use an AOB and there have not been consumer complaints on the work done. Preferred vendor programs are a tool for carriers to minimize their AOB losses, he said.

“Insurance companies are responding to the crisis by doing what they can to guide people to providers that don’t use AOBs,” he said.

Tampa-based VetCor, which provides restoration services across the state, works with 17 carriers as a preferred vendor and said it has never used an AOB on more than 2,200 jobs in its three years in business.

“There are disreputable contractors saying they can’t perform work because of big bad insurance carriers. That is accurate if you are going beyond the scope of needed work. These contractors are creating an adversarial relationship,” said Paul Huszar, president, VetCor LLC, which provides new careers for military veterans no longer on active duty.

Huszar said his business relies on referrals from carriers, which he said are “usually legitimate claims from people who need help.”

He said his company has found itself becoming an advocate against AOB abuse, including letting carriers know if they see abuse taking place.

“There have been a few incidents where we have been called to put a tarp on a roof and we get out there and there is no damage. The customer says, ‘someone told me to put a claim in and I’ll get a new roof.’ If we see that we call the insurance company and let them know something smells funny. We represent consumers if we think it’s fraud and we represent carriers if they are getting screwed,” he said.

Huszar said all affected parties need to work together in fighting AOB abuse, and managed repair and preferred vendor programs are just one option until lawmakers take up the issue.

“The companies have to do something to combat uncontrollable rising claim costs from AOB,” he said. “But frankly, without legislation this problem is not going to be solved.”

Companies are also looking at premium discounts for customers who take proactive measures to protect against water damage, such as outfitting their homes with water damage protection systems.

Neil Schwartzman is the owner of the Coral Gables, Fla.-based company H20 protection, which sells PipeBurst Pro water damage prevention technology.

The Whole Home Water Detection product works by detecting when a pipe bursts and shutting off the main water supply almost immediately to prevent water damage.

Schwartzman said there has been increased interest from carriers in the last several months as they try to find new ways to reduce AOB losses.

He said several dozen, mostly high-value homeowner carriers, already offer incentives to have this type of a program.

He is currently working with several Florida insurance carriers seeking approval from regulators to offer premium discounts when a system is installed.

“If the [water damage protection] discount was available to all in Florida, then systems would be installed [and] the number of water damage claims would be reduced significantly,” Schwartzman said.

What Comes Next?

The industry and regulators agree that substantial progress has been made in educating on the abuse. Commissioner Altmaier said this year’s visibility and media attention has put his office in a good position for proposals to be heard during the 2018 legislative session.

McFaddin said the industry did an “impeccable job” staying on message this session and supporting the OIR and Citizens proposal, which died shortly after being introduced in a Senate committee.

Even though the reforms failed, McFaddin said the industry learned that working together is an effective strategy and that needs to continue.

McFaddin added that at least next year the industry won’t have to “waste time educating the legislature” about the abuse because it is now widely known and watched.

“Will we get something done for sure, 100 percent?” she asked. “I can’t say that, but I am hopeful – optimistically hopeful.”

Former CFO Atwater said the industry did a better job of getting its message out this session, but there is still “tremendous rate sensitivity” among consumers.

The industry, he said, has not effectively communicated why AOB abuse is translating into higher rates and, until then, consumers will not support legislative efforts.

“I think consumers believe that the rates come [because] the insurance company just wants more rates and the government just keeps giving it to them. I don’t think that most consumers understand that these losses are required to be built into the rate filing. And they’re going to be granted,” he said.

He urged the industry to share with the public “the actual evidence that it has in its databases” on the magnitude of the losses that are being built into rates.

PIFF’s Carlson said carriers’ data is out there through OIR’s data call done in 2016, and Citizens plethora of public information on rising losses, claims and litigation. He said some lawmakers have accused the industry of not being transparent to avoid fixing the issue.

“What else do you need us to give you that you don’t have? I fear that is a political request and not a policy request,” he said.

Until the next session, the industry and regulators say all they can do is continue to beat the drum about AOB abuse and take steps to protect company solvency and their policyholders.

“I do believe there is light at the end of the tunnel,” Altmaier told Florida Cabinet members. “I do believe there are ideas on the table that not only maintain consumer protections and their ability to have their claims paid, but also protects their ability to pay affordable insurance rates and shop insurance products across a wide range of carriers.”

The Southeast has seen its fair share of natural disasters and flooding in the last several years, including two hurricanes in Florida last year – the first hurricanes to hit the state in more than a decade. But none of these events have come close to reaching the potential impact a serious storm surge event could have on the region.

According to CoreLogic’s 2017 Storm Surge Report, which examines risk from hurricane-driven storm surge for homes along the Atlantic and Gulf coastlines across 19 states and the District of Columbia, as well as 86 metro areas, the total reconstruction cost value (RCV) in the event of a hurricane storm surge inundation in these regions would be more $1.5 trillion.

The total number of homes that could be affected along the Gulf and Atlantic coasts, defined by CoreLogic as the 3,700 miles of coastline extending from Maine to Texas, is nearly 6.9 million. In the Gulf Coast region – running from Texas through the tip of South Florida – almost 3 million homes are at risk with a total RCV of $593 billion. The Atlantic Coast accounts for 3.9 million homes and a RCV of more than $970 billion.

To estimate the value of property exposure of single-family residences, CoreLogic uses its reconstruction cost valuation (RCV) methodology which estimates the cost to rebuild the home in the event of a total loss. The reconstruction cost estimates more accurately reflect the actual cost of damage or destruction of residential buildings that would occur from hurricane-driven storm surge since they include the cost of materials, equipment and labor needed to rebuild and also factor in geographical pricing differences. Actual land values are not included in the estimates. The values in this report are based on 100 percent, or total, destruction of the residential structure.

The Southeast coastal states CoreLogic examined in its report of Alabama, Florida, Georgia, Mississippi, South Carolina and North Carolina, account for at least 3.6 million of the 6.9 million homes at risk along the Gulf and Atlantic Coast.

Unsurprisingly, the majority of those homes – about 2.7 million – are in Florida, which carries a whopping $536 billion reconstruction cost value, the highest of any of the 19 states.

The Southeast also accounts for nine of CoreLogic’s top 15 metropolitan areas at greatest risk of storm surge, with six of those being Florida cities.

It’s common knowledge that Florida is at risk of hurricanes, but the state has gone many years without experiencing significant damage from a major storm. Dr. Tom Jeffery, senior hazard scientist at CoreLogic, said that can often lead to “hurricane amnesia,” among citizens and municipalities and that can impact whether they are adequately prepared for when a big storm event does occur.

“This report is about making people aware of the fact that we are in hurricane season. We don’t know when or where they will happen, but they have the opportunity to affect the coastal U.S. and we want to put it on people’s radar,” Jeffery said. “A lot of these areas don’t realize what the risk is once you are outside the 100-year flood plain.”

He added that many people in these communities don’t realize what their storm surge risk is, outside of the 100-year flood plain.

“Large hurricanes especially can really push surge water quite a bit inland, but after big events people say they didn’t realize their property was at risk,” Jeffery said. “Hopefully, this information can give them the incentive to go to their insurer and find out if they are in a high-risk area and adequately prepare.”

CoreLogic included a probabilistic storm surge analysis focused on Florida in this year’s report, with specific emphasis on storm surge from Hurricane Matthew, which changed course before making landfall last year, sparing the state from the worst possible scenario. The goal of probabilistic modeling of hurricane perils, CoreLogic’s report said, is to provide risk managers with greater insight as to what could happen in order for them to better plan and manage their businesses.

“Probabilistic loss provides an evaluation of the specific amount of damage that could be expected from a single storm event or a set of simulated events, called probabilistic events, which are informed by historical storm records that are similar in size and scope,” the report states.

This analysis focused on the historical storms in Florida that have caused storm surge damage beginning in 1900, and how Hurricane Matthew compares. Of the 97 catastrophic hurricanes in Florida since 1900, Hurricane Matthew ranked No. 19 among historical storm surge events. CoreLogic said the storm surge damage from Matthew made up less than 10 percent of the total financial loss, with the rest being a result of wind damage.

Number one on the list was the “13^th hurricane of 1944″ (before hurricanes were given actual names), which caused $15 billion worth of damage on 471,000 homes in today’s terms. Hurricane Andrew, which hit in 1992, was ranked No. 4, and Wilma, which hit in 2005, was ranked No. 15.

Though Florida’s first hurricanes in 11 years were not as devastating as they could have been, the two storms that did occur – Hurricane Hermine, which hit in September of 2016, and Hurricane Matthew – caused more than $3.2 billion combined in damage to Florida.

Jeffery said the state got lucky last year. He added that awareness is key to minimizing loss in the future, and the modeling company has seen an increased interest in information and proactive mitigation discussions this year.

“Florida went a long stretch without an impactful landfall hurricane and last year was an eye opener, an awakening to get people to think about it since we don’t know when that next one is going to come ashore,” he said.

Private auto net incurred losses are set to hit a new record in 2017, according to a report by S&P Global Market Intelligence.

S&P projected that auto losses will increase by almost 7% in 2017, hitting about $154 billion. That number reflects a skyrocketing volume of costs and claims. Auto losses also spiked by 13% last year, prompting many carriers to pursue rate increases, S&P reported. Those rate increases may pinch customers’ pocketbooks in the near term, but they’re expected to begin increasing industry profitability.

“Though underwriting results in many business lines will deteriorate in 2017, we expect the P&C industry to produce only a modest underwriting loss for the year,” said Tim Zawacki, senior insurance research analyst for S&P Global Market Intelligence. “Needed rate increases for the personal and commercial auto businesses will begin to positively impact industry results in 2017. We expect additional improvement in those lines to take place over the next several years.”

The industry experienced historically high loss ratios last year, S&P reported. Those losses – combined with more time spent on the road by motorists – should continue to push auto insurance premiums higher.

Among the other findings from S&P’s recent US Property & Casualty Insurance Market Report:

• Soft market conditions continue to prevail in most non-auto lines, which means competition remains fierce. S&P projected only slow improvements in investment returns from the historic lows of 2016.
• S&P Global Market Intelligence predicts an industrywide combined ratio of 100.7% across business lines this year. It also projects growth of 4.3% in direct premiums, reflecting higher auto rates.

The large-scale global ransomware cyber-attack over the weekend should serve as a wake-up call to many small and medium-sized businesses.

While the market for large corporations’ cyber insurance needs has significant penetration, small and medium-sized businesses take out far fewer cyber policies. But as the global ransomware attack illustrated: every business is potentially at risk from cyber criminals.

“I think this demonstrates the need for being insured, whether you’re a small or a large company,” NAS chief underwriter Mike Palotay said.

“This has been an indiscriminate attack. It’s not targeted,” he explained. “You don’t have a hacker behind each attack on each company – it’s really more of an automated thing. It’s basically just spray and pray, really. So you’ve got small companies who are experiencing outages and disruptions and having to pay extortions. And then you’ve got FedEx and the National Health Service [in the UK] and a bunch of much larger organizations experiencing problems.

“Small and medium-sized business are very, very underinsured. The last figures I saw for small businesses that buy cyber insurance were in the single digits. This might be a wake-up call.”

The number of companies attacked who have paid out – or claimed with insurers – is low. A UK company tracking ransom payments through Bitcoin (the cyber criminals’ payment choice in this attack) was only about $50,000 yesterday. The attack was launched on Friday.

However, the widespread attack also brought to the fore a potential problem in the way insurance is priced, Palotay said.

“It does speak to why underwriting large books of cyber insurance is so challenging,” he said. “The aggregation potential is certainly there, and there’s been a big focus on that in the last few years. And rightly so. There are big, big aggregate numbers out there for the leading insurers and when something like this happens I think it’s a big wake-up call to everyone that maybe rates are getting too low and maybe we should be more careful. Hopefully it’s a kind of come-to-Jesus moment.

“The market has been growing fast and rate pressures are getting pretty significant. I don’t think the rates are really taking into account the substantial aggregation exposure from something like this, where you’ve got an automated malicious-code attack that targets a widespread vulnerability. This is not about a hacker using a specific tool to attack a company, this is about a self-replicating virus that spreads throughout the internet targeting millions of computers. That kind of thing is what keeps me up at night.”

Davy Andrews is so adept at technology that he’s become the de facto IT troubleshooter in his office. But there’s one bit of tech he won’t touch: self-driving cars.

“I wouldn’t want to be the first to jump into something with that kind of risk,” said Andrews, 33, an administrative assistant at a New York investment firm. “I would have to see enough evidence that it is safer, considerably safer. From where we are right now, it’s hard to imagine getting to that point.”

Autonomous autos are advancing so rapidly that companies like Uber Technologies Inc. and Alphabet Inc.’s Waymo are beginning to offer robot rides to everyday consumers. But it turns out the traveling public may not be ready. A recent survey by the American Automobile Association found that more than three-quarters of Americans are afraid to ride in a self-driving car. And it’s not just Baby Boomers growing increasingly fearful of giving up the wheel to a computer, a J.D. Power study shows — it’s almost every generation.

“One of the greatest deterrents to progress in this field is consumer acceptance,” U.S. Transportation Secretary Elaine Chao told Bloomberg News last week at a department-sponsored conference in Detroit. “If there’s public concern about safety, security and privacy, we will be limited in our ability to help advance this technology.”

Most commuters don’t have access to a self-driving car, so Chao has called on Silicon Valley to ” step up” and explain how they work. She and other regulators advocate for autonomy as a solution for curbing the hundreds of horrific collisions that happen every day in regular automobiles. Among those that end up being fatal, 94 percent are caused by human error, according to U.S. authorities.

Consumers will only become comfortable with driverless cars after they ride in them, Mary Barra, the chief executive officer of General Motors Co., said this week. The largest U.S. automaker is testing 180 self-driving Chevrolet Bolts and ultimately plans to put them in ride-hailing fleets, though it won’t say when.

“You can talk about it, but until you experience it,” self-driving cars are hard to comprehend, Barra told reporters at the GM factory building the Bolts north of Detroit. “Once you’re in the vehicle and you see the technology, you understand how it works.”

The opportunity for autonomy to make a meaningful impact on public safety is immense. Last year, 40,200 people died in motor-vehicle accidents on U.S. roads, the National Safety Council estimates. That was up 6 percent from the year before.

“Forty thousand people a year is unacceptable,” Alex Epstein, the council’s senior director of digital strategy, said during a panel discussion at the TU-Automotive technology conference in Detroit last week. “It’s a jumbo jet going down every couple days.”

Dangerous as it may be to operate cars themselves, many drivers are anxious about autonomous technology because they associate it with the fragility of electronic devices. Laptops crash and calls drop with nagging regularity. The consequence of a computerized car crash is much greater.

“While it might be convenient to have a car drive for you, driving is a very high-stakes pursuit,” said Andrews, who has no interest in letting a robot take the wheel of his Volvo. “When things go wrong, it’s not the same as a normal computer error.”

Another culprit killing consumer confidence has been automakers over-hyping the capabilities of today’s driver-assist technologies. That’s led some drivers to drop their hands from the wheel even with systems built to require constant attention of the traffic environment, as was the case with the fatal crash last year of a driver in a Tesla operating in the semi-autonomous Autopilot mode.

Respondents to J.D. Power’s survey made mention of Tesla crash and recognized vehicles with autonomous features can still get into accidents, said Kristin Kolodge, executive director of J.D. Power’s driver-interaction research.

“When you’re not in control and the vehicle is in control, now you’re in this dark space where you wonder ‘What actually happens if the technology fails?”‘ she said. “This fear of failure is the major reason” consumers are wary. 

Regulators investigated the Tesla crash and cleared the company’s Autopilot system of fault in January. And the company hasn’t been the only one to come under scrutiny — Daimler AG last year pulled Mercedes-Benz ads that consumer groups complained had wrongly suggested its E-Class sedan with driver-assist features was fully autonomous.

The television spot showed the driver removing his hands from the wheel, even though the automaker’s Drive Pilot system requires resuming control every 30 seconds.

“The fastest way to make sure the public does not accept these technologies is to over-promise and then have some horrific crash because the consumer believed the capability was higher than it actually was,” Epstein said.

Another impediment to consumer acceptance may arise from semi-autonomous features, which should inspire confidence and instead feel unnatural and annoying, said Lukas Kuhn, chief technology officer at Tourmaline Labs Inc., a California company that analyzes driving behavior for insurance and ride-sharing companies.

Driver-assist features like adaptive cruise control, which adjusts speed to the flow of traffic and lane keeping that steers a car back into the lines, can feel intrusive rather than intuitive.

“In order to make the user buy into the feature, we have to make it feel more natural,” Kuhn said. “If I can drive this car way better than the machine, why should I take my hands off the wheel?”

Homeowners in South Florida, as well as in many other parts of the state, should expect additional rate increases next year from the state-run insurer of last resort.

Citizens Board of Governors approved recommended rates and policy changes for 2018 that the company said reflect rising nonweather water losses, abuse of a policyholder right referred to as assignment of benefits (AOB) and out-of-control litigation that, left unchecked, will force rate hikes for years to come.

By unanimous vote, board members recommended a 5.3 percent statewide increase for personal lines policyholders – homeowners, condominium unit owners and renters – with most increases concentrated in three South Florida counties where, according to Citizens data, water losses, AOB abuse and litigation are disproportionately severe.

Board members also approved a series of policy changes that the insurer hopes to implement to reduce claims costs for nonweather water losses that it says have been pushing rates higher for South Florida customers over the last few years. If approved by the Florida Office of Insurance Regulation (OIR), the changes would take effect in February 2018.

Among the major policy changes is a $10,000 cap on water loss repairs for customers who decide not to participate in the Citizens Managed Repair Program, which links customers with a network of vetted contractors. The voluntary managed repair program, coupled with a free emergency water removal service, will become available to new Citizens policyholders after July 1, 2017, and for existing customers when their policies renew.

Other policy changes include expanding obligations to third parties that accept an assignment of benefits. Currently, contractors who accept an assignment are not bound by the same obligations, including allowing Citizens adjusters to inspect a claim in a timely manner or providing proof that a loss has occurred.

“These proposed rate increases and product changes are critical for Citizens’ efforts to bring some relief to a market that is being made increasingly expensive by unnecessary litigation and out-of-control water loss claims,” said Chris Gardner, chairman of the Citizens Board of Governors. “Unfortunately, we are making it more expensive for many of our customers to own a home.”

The 2017 legislative session concluded in May without making significant changes to state law regarding assignment of benefits and the “one-way attorney fee” statute that many stakeholders agree are driving up costs that must be paid through higher premiums. Citizens joined other insurers, business and consumer groups pushing for reform.

“It’s ironic that our rates for wind coverage are coming down, but Citizens policyholders in South Florida still must brace themselves for continued rate increases,” Gardner said. “We don’t want to raise premiums, but Citizens is obligated by statute to set actuarially sound rates.”

The 2018 rate proposal continues a recent trend in Miami-Dade, Broward and Palm Beach counties. Homeowners with multiperil coverage in Miami Dade County, for example, will see an average increase of 10.5 percent, or $359, from 2017 premiums. Broward and Palm Beach county homeowners will see rates increase by 10.4 percent and 9.3 percent respectively.

Outside of the Tricounty area, many policyholders will see rates decrease or remain flat. Citizens’ homeowners policyholders in 56 of 67 counties will see average rates decrease under the set of proposed rates.

Proposed rates and policy changes must be approved by OIR, which oversees all Florida property insurers. Both the new rates and policy changes would take effect in February 2018.

“We were hoping for legislative change and a surgical solution,” said Barry Gilway, Citizens president/CEO and executive director. “Given that this did not occur in 2017, we cannot wait for the trends to worsen and take no corrective action.”

The full rate kit can be viewed on Citizens website.

Almost five years after Superstorm Sandy, one third of homeowners in several coastal states are still unaware of hurricane deductibles and how they work, new insurance research has found.

Not only did 33 percent of respondents say they had never heard of these deductibles or were not sure what they were, one quarter of respondents lacked an understanding of deductibles in general.

The Insurance Research Council (IRC) released its poll results as the National Oceanic and Atmospheric Administration projects two to four major hurricanes this hurricane season, which lasts from June 1 through November 1.

Homeowners in New Jersey, North Carolina, South Carolina, Florida and Texas were asked whether they were familiar with hurricane deductibles, which is a higher deductible found in homeowners insurance policies that applies when a hurricane occurs.

“The findings from this survey suggest that ample room exists for educating homeowners about a key feature of every homeowners insurance policy—deductibles,” said Elizabeth Sprinkel, senior vice president of the IRC. “The need is especially acute as the 2017 hurricane season gets underway and insurers hope to minimize post-event misunderstandings with their policyholders regarding deductibles.”

Hurricane deductibles were a prominent issue in 2012, with misunderstanding and confusion due to the fact that Sandy did not make landfall as a hurricane. These deductibles, which became more common after insurers suffered heavy losses from Hurricane Andrew in 1992, are often calculated as a percentage of the insured value of a home — another concept the IRC survey found unfamiliar to homeowners.

One in three respondents with percentage-based hurricane deductibles did not know or were unsure of the percentage applicable to their deductible, and four in 10 did not understand the basis for calculating the deductible. One in four respondents incorrectly thought the percentage was applied to the total amount of their claim.

The survey also found that the level of understanding of hurricane deductibles varied across the five states studied. Compared with respondents in the other states, New Jersey respondents demonstrated the lowest level of awareness and understanding of several hurricane deductible issues, despite the fact that about 346,000 homes in New Jersey were damaged or destroyed by Sandy.

The report, “Public Understanding of Hurricane Deductibles, Need for Consumer Education Persists,” is based on an online survey conducted by GfK Public Affairs & Corporate Communications on behalf of the IRC. A total of 1,047 homeowners were surveyed – 200 or more in each of the five states studied. Only homeowners living in selected counties where the home involved was their primary residence and with insurance coverage purchased exclusively from private insurance companies were included in the survey.

https://www.thig.com/hurricane-tracker/

https://www.thig.com/learning-center/natural-disasters/hurricane-season-2017-need-know/

http://www.stjohnsinsurance.com/claims-hurricane.aspx

Hurricane Information

Weathering A Hurricane

Hurricanes are not strangers to homeowners in the Southeast. Knowing what to do can make the difference when it comes to protecting yourself and your home.

Before Hurricane Season Begins

• Plan an escape route.
• Have a stockpile of emergency supplies on hand (drinking water, canned goods, non-perishable foods, manual can opener, flashlights, batteries, candles, first aid kit, essential medications, matches in waterproof containers, portable radio, etc.)
• Develop an emergency communication plan in case you’re separated from loved ones.
• Hurricane shutters are your best protection. If you do not have them, you can use marine plywood panels cut to fit your windows. Pre-drill holes every 18 inches for screws and mark which board fits which window.
• Keep trees free of weak or dead branches.
• Have a video or photographic inventory of your possessions stored in a safe place away from your home. If your home’s damaged it will be invaluable in settling the claim.
• Review your homeowners insurance to ensure it is adequate. Remember, flooding is generally not covered by a homeowners policy. So if you do not have flood insurance, you may want to talk to your agent.

During A Hurricane Watch And Warning

• Pay close attention to progress reports.
• Protect windows.
• Check emergency supplies, make sure you have a full tank of gas in your car and review your evacuation plan.
• Bring outdoor furniture, etc. inside. Anchor items that can not be brought in.
• Set your freezer and refrigerator at the highest setting in case you lose power. (If power is lost, turn off major appliances to avoid power surge.)
• If you are in a surge zone, elevate your furniture to protect it.
• Store valuables and papers in a watertight container at the highest level of your home.
• If evacuation is necessary, unplug appliances, turn off electricity and the main water valve and leave as quickly as possible.

After The Hurricane

• If you evacuated, return home only after authorities say that it is safe. Stay away from flooded roads and washed-out bridges.
• Avoid dangling power lines and report them immediately to the power company, police or fire department.
• Enter your home cautiously. Sometimes snakes, insects and animals are driven to higher ground by flood water.
• Open windows and doors to ventilate and dry your home.
• If your home has been damaged, check for gas leaks (open a window, leave and call the gas company if you find one), obvious electrical problems and sewer and water line damage.
• Take pictures of the damage – inside and out. You will need it for your insurance company.