WHAT CAN I DO IF MY POLICY IS NON-RENEWED?

Your homeowner’s insurance policy—just like your auto insurance policy—is an annual contract in which a company agrees to pay for your potential losses within a given year in exchange for a premium.

Homeowner’s insurance is a contract that people, with the help of their insurance agents, purchase to protect their most important investment. It provides financial security, and it is an important part of the state and national economic engine. But insurance is not is a long- term commitment, either on the part of the homeowner or on the part of the insurance company.

Insurance companies paid $35 billion in claims in Florida over the past two years to cover the damage left behind by a record eight hurricanes. In order to stay in business after these massive payouts, some companies have been forced to reduce their exposure to future losses. For these companies, the decision not to renew some contracts for Florida homes is the only way to keep providing coverage for other Florida homes.

If your policy cannot be renewed, there are several things your insurance agent can do on your behalf. Working with their insurance agents, consumers can:

• Call the Florida Market Assistance Plan at 1-800-524-9023 to find insurance agents and agencies in your county who are accepting new business.
  

• Contact Citizens Property Insurance Company, commonly called “Citizens.” Citizens is a not- for- profit, state-run program for homeowners who cannot find coverage with traditional insurance companies or in the open market. Citizens can be contacted at 1-800-524-9023 or go to www.citizensflorida.com
  

• Consider a policy with a surplus lines insurer. Surplus lines insurers are not licensed in Florida, so they don’t meet some of the regulatory requirements the state imposes on licensed insurance companies, such as annual filings and rate approval. Surplus lines, however, do register with the state and may offer different coverage options and deductibles.

Citizens Property Insurance Corporation was established by the state government to provide insurance for homeowners who couldn’t find coverage anywhere else. Like other state-run “insurers of last resort,” it is not allowed to provide coverage to anyone who can purchase it from the traditional private marketplace.

While most Florida homeowners can get coverage from insurance companies, owners of properties most at risk, such as homes built along coastal regions and those subject to sinkholes, often have to turn to Citizens.
When Citizens does not have enough money to pay all of its claims, the state imposes taxes, known as “assessments,” on all Florida property insurance premiums, including premiums paid by property owners who are not covered by Citizens.

One of the ways the state government keeps these taxes as low as possible is by making sure that Citizens does not compete with the private sector pricing. Its insurance rates are higher than those from the private sector.

For many years, it was difficult for anyone to imagine a scenario where Floridians would have to subsidize Citizens, but the hard to imagine became reality in the aftermath of the 2004 and 2005 hurricane seasons.

DO I NEED FLOOD INSURANCE?

Flood insurance pays for losses from floods and other forms of rising water, such as the storm surge that frequently accompanies hurricanes and tropical storms. Homeowner’s insurance policies do not cover damage from flooding or storm surge.

The National Flood Insurance Program (NFIP) issues flood insurance. It is usually sold through private companies and private insurance agents. There is typically a 30-day waiting period between completion of the application and the effective date of the coverage.

How to decide if you need flood coverage

Homes located in flood plains, or Special Flood Hazard Areas (SFHAs), are at high risk for flood damage, and homeowners are required to have flood insurance if they live in those areas. Flood insurance is also available for homes located outside of flood plains. Even if your home is not located in a flood plain, you might need flood insurance, which can be very inexpensive It is recommended that all Floridians call their insurance company for a flood insurance quote. You may decide that the coverage is worth your peace of mind.

For more information on flood insurance, call (888) 379-3689, email floodsmart@dhs.gov or check out the website at http://www.floodsmart.gov

WHERE CAN I GET ADDITIONAL INFORMATION ABOUT DISASTER PREPAREDNESS?