ca insurance continuing

ca insurance continuing
In the wake of Hurricane Katrina and other destructive storms, more affordable property insurance was not easy. Many private insurers shed high risk clients after storms in 2004-2005, and the ratings for the other. For those who no longer afford private insurance (or states are not insurable by private insurers), state insurer Citizens Property Insurance Corp. is the last resort.

Over the past year, the state has tried to lower property insurance rates for those who are insured with CPIC. Following recent criticism of the property changes, however, Florida residents who are insured by private companies will pay more at the end, so that prices can remain low for the insured by the state-owned enterprises. The last week in March saw the Florida Senate approved some changes to the property, which may ultimately increase property prices by around 3%.

The Bill was Chief Financial Officer Alex Sink and approved by the Senate Banking and Insurance Committee. The intended effect is to reduce the Florida Hurricane Catastrophe Fund by $ 3 billion. This means the state can increase its investment in CPIC and therefore its risk.

At the same time, however, the state has also to freeze CPIC insurance rates until the end of 2009. CPIC insures more than 1.3 Florida residents, and the rate freeze, which is done in the past year, an increase which have seen up by more than 29%.

The problem is, according to critics, CPIC that the premiums are not high enough, and that the company did not have enough money to be able to pay the claims if a major storm hits.

This is the reason why the $ 3 billion reduction in the Hurricane Catastrophe Fund is of importance. The catastrophe fund is a kind of safety net that can come into play when Florida is surrounded by a large hurricane, and is the private insurer reimbursement of a portion of the money they pay in claims. But with the fund now to $ 3 billion, the deficit is due to the increase in premiums for homeowners.

Last year, the state has actually increased the catastrophe by $ 12 billion, but this year was around 3 billion U.S. dollars. The fund was in the past year to reduce costs for insurers, and indirectly also for homeowners. However, by increasing the disaster, the state of Florida was also its own risks.

The state now wants to begin decreasing their investment in the Fund to reduce the risks. The net effect is likely, however, the opposite of what it originally intended. With private insurers, based on more risk as compared to last year, the result is more than likely will be increased property prices. The estimate is about 3% overall, with a slightly higher increase possible for Southern Florida residents.

Chief Financial Officer Alex Sink acknowledges that an increase in prices is possible, but also says that if the insurers are trying to price to an unreasonable level, it is the state step in.

Calum MacKenzie is Broker / Owner of Real Living Southern Homes a residential real estate agency in Wesley Chapel, Florida and the Tampa Florida Real Estate and Land O 'Lakes real estate markets.