Will Superstorm Sandy Hike Insurance Rates for Florida?

The Florida Insurance Council News recently reported that the Insurance experts say the costs associated with losses from Superstorm Sandy in the northeast should not affect Florida homeowners.

The truth is, only time will only tell if Superstorm Sandy will impact insurance rates for Florida Homeowners. It is our goal to share information to help our clients to be able to make informed decisions.  Please, be ensured that that Erb and Young Insurance agents are making themselves available to review your insurance coverage and make any necessary adjustments. In September, we discussed the importance of Flood Insurance. With the recent events of Superstorm Sandy in mind, we will expand on this topic.

Flood Insurance is Important to All Florida Property Owners

Florida Insurance is in the spotlight due to Flooding from Tropical Storm Isaac and Superstorm Sandy

Florida Insurance is in the spotlight due to Flooding from Tropical Storm Isaac and Superstorm Sandy.

Sam Miller of the Florida Insurance Council is quoted as saying that the Florida market is dominated by state-backed Citizens and local insurers who operate only in Florida along with a smaller number of Florida-only subsidiaries of a few national carriers. Therefore, Miller says none should experience significant losses because of Sandy. We hope that he is correct, even if it is true that Insurance often becomes tougher to get in the wake of disasters. Already, the Biggert-Waters Flood Insurance Reform Act of 2012, adopted last July, phases out reduced premium rates for federal flood insurance on certain properties — including non-primary residences. Florida business and homeowners have experienced sharp increases in recent years on property policies although the state has not seen a hurricane since Wilma in late 2005.

Many experts indicate the economic brunt of the hurricane may be felt by FEMA’s National Flood Insurance Program — not necessarily by the insurance industry. That is — if Superstorm Sandy’s victims obtained flood insurance coverage. That’s a big “if.”

Insurance experts stress that the most you can get through the National Flood Insurance Program is $250,000 for the structure, $100,000 for contents. Those with expensive homes should speak to their insurance agents about to obtaining private insurance for excess flood coverage.  Other important factors to consider: Know whether you have coverage for sewer backups and drain backups, which many standard homeowners policies omit unless specifically requested. Overloading of sewer and drain systems, causing water to back up inside the house through toilets and drains, is one of the two chief causes of water damage. Don’t expect that to be covered by the federal flood program.

Lynne McChristian of the Insurance Information Institute in Tampa Florida says Sandy’s effect on reinsurance markets should be minimal since much of the damage is from water and that is covered by the National Flood Insurance Program.

Lynne recently shared in her blog, “My New York colleagues have been feeling like Floridians all week, minus the heat and humidity, as they dealt with the aftermath of the tropical storm that hit them… With public transportation shut down, most of them had no way to get to work, and since their high-rise office building lacked power (and also lacked heat), the backup plan involved everyone working from home, which was also without power and heat for some of them. These are minor inconveniences compared to what so many people are going through. If you’ve lived in Florida during the 2004 and 2005 hurricane seasons, you know this firsthand… We haven’t had a hurricane strike the “most hurricane-prone state” in seven years, as we all know and feel grateful for the reprieve. Yet, being realistic, we must assume that the greater the length of time since the past storm only means the next storm is getting that much closer… Our thoughts and prayers for all those impacted are genuine, since Floridians have “been there, done that,” and we know from experience that a smooth recovery depends greatly on how well one prepared in advance. We keep learning lessons from severe weather, and being an engaged student is imperative. With Hurricane Season 2012 concluding on November 30, we get six months to plan for the next one.” 

With this information in mind, now is the time to obtain a new insurance policy or make changes to existing coverage.  We say that because once an official storm warning or watch for Florida is issued by the National Hurricane Center (NHC), it’s too late. The Insurance Information Institute (I.I.I.) and Florida Insurance Council (FIC) want consumers to know that insurance coverage decisions must be made well before a storm approaches. Insurers stop writing new business and restrict coverage changes if a storm is imminent.

Temporarily suspending the ability for people to change coverage or get a new policy when a storm is imminent is a long-time practice. It prevents an insurance purchase from being made when the chances of having damage from a hurricane are greatly increased. “Insurance is available because the possibility of loss is unforeseen or unknown,” said Lynne McChristian, Florida representative of the I.I.I. “No one would offer insurance protection if a loss were a sure thing, and that is much more likely to happen when a storm is on the horizon.”

Please, with this information in mind, contact your Erb and Young Insurance Agent to discuss your Homeowners and Commercial Insurance policies. Making informed decisions and taking responsible actions now will help you to maintain, protect and enhance the value of your personal and business properties.

Erb and Young Insurance is an Independent Insurance Agency that works with a multiple of insurance carriers to bring you personalized solutions and service for your personal and business insurance needs. We offer a complimentary asset overview and policy evaluation that will save you both time and money.  Contact Erb and Young now to acquire a customized Insurance policy that is the right fit for you and your budget. Get the peace of mind that you deserve by calling us now at 321-234-1690.

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