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Another insurer to drop policies (Nationwide won't renew 40,000 policies for Florida homeowners)
St. Petersburg Times ^ | September 1, 2005 | JEFF HARRINGTON

Posted on 09/01/2005 1:49:31 AM PDT by Cincinatus' Wife

Not all Nationwide Insurance homeowners in Florida have to worry about a round of rate hikes going into effect starting this month.

Thousands won't be renewed at all.

Beginning March 1, Nationwide will not renew about 35,000 homeowners' and 4,800 mobile home policies across the state, the Columbus, Ohio, company said Wednesday. It also will no longer write mobile home policies starting today and won't renew about 12,000 commercial policies (mainly condominiums, apartments and rentals) starting March 1.

After the cutback, the fourth-biggest property insurer in Florida will continue to carry about 570,000 policies in Florida, including 240,000 homeowners' policies.

"It has become increasingly apparent that we are not comfortable with our current exposure in the Florida property market," Jeff Rommel, the company's regional vice president of Florida operations, said in a statement.

"While these are difficult decisions, we have an obligation to act in a responsible and thoughtful manner to ensure long-term stability for Nationwide policyholders in Florida and across the country."

The news wasn't a surprise.

Last month, Nationwide said it would stop writing new homeowners' policies across Florida starting this month and said it was considering more drastic measures, including nonrenewals in the state.

The local fallout includes dropping almost 9,800 Nationwide policyholders in Pinellas, Hillsborough, Pasco, Citrus and Hernando counties. Of those, 8,233 are in Pinellas, meaning more than a third of Nationwide's policies in the county will not be renewed.

The Florida pullback is the latest fallout from last year's four-hurricane barrage.

More than a half-dozen companies have left the state or stopped writing policies since hurricanes Charley, Frances, Ivan and Jeanne caused a combined $22-billion in insured damages. Among them: Safeco Insurance, which told the state last month it would not write new policies and, beginning in 2006, would stop renewing customers. Allstate also has decided not to renew 95,000 policies.

In July, Nationwide won approval to raise rates an average of 21 percent on homeowners' policies and 25 percent for mobile homes.

In the bay area: Pinellas County homeowners insured by Nationwide face an average 29 percent increase in premiums; Hillsborough, 16.3 percent; Pasco, 28.9 percent; Hernando, 22.8 percent; and Citrus, 3.8 percent.

The biggest insurers, State Farm and Allstate, have not written homeowners' policies in high-risk, coastal areas of the state for years.

Increasingly, the only choice for property owners seeking coverage is one of the many startup insurers with a limited track record for handling claims or the state-run Citizens Property Insurance, which covers those who cannot find property insurance on the open market. Citizens has swelled into the second-largest insurer in Florida. By state law, its premiums are supposed to be higher than the market average as a disincentive to be used by homeowners as an easy fallback.

Information from Times files was used in this report. Jeff Harrington can be reached at 813 226-3407 or harrington@sptimes.com


TOPICS: Business/Economy; Culture/Society; Extended News; News/Current Events; US: Florida
KEYWORDS: allstate; coastalproperty; flooding; hurricanes; insurance; nationwide; statefarm
***....More than a half-dozen companies have left the state or stopped writing policies since hurricanes Charley, Frances, Ivan and Jeanne caused a combined $22-billion in insured damages. Among them: Safeco Insurance, which told the state last month it would not write new policies and, beginning in 2006, would stop renewing customers. Allstate also has decided not to renew 95,000 policies.

.....The biggest insurers, State Farm and Allstate, have not written homeowners' policies in high-risk, coastal areas of the state for years....***

1 posted on 09/01/2005 1:49:31 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife
In July, Nationwide won approval to raise rates an average of 21 percent on homeowners' policies and 25 percent for mobile homes.

Well we have a MAJOR CLUE as to the source of the problem right there.

In a free market, there will be a price at which all sorts of insurance will be available.

In a government regulated market, you will quite likely end up with none at all.

2 posted on 09/01/2005 2:01:14 AM PDT by konaice
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To: konaice

Interesting point.

It's the bottom line.

Those in areas prone to hurricanes and flooding are going to pay dearly for insurance.


3 posted on 09/01/2005 2:05:57 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife

good, quit bailing out poor decisions


4 posted on 09/01/2005 2:06:40 AM PDT by sure_fine (*not one to over kill the thought process*)
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To: Cincinatus' Wife

Is Citizens breaking even?


5 posted on 09/01/2005 2:06:42 AM PDT by HiTech RedNeck (No wonder the Southern Baptist Church threw Greer out: Only one god per church! [Ann Coulter])
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To: HiTech RedNeck

I don't know.


6 posted on 09/01/2005 2:07:19 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife

Apparently Katrina made landfall on the same calendar day that Andrew did. Which means 11 named hurricanes in 2005 up to this point...compared to one single named hurricane up to the same point in '92. The insurers have noticed these stats too.


7 posted on 09/01/2005 2:08:49 AM PDT by XpandTheEkonomy
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To: HiTech RedNeck
Is Citizens breaking even?

Which one? There's about 8 of em by that name.

8 posted on 09/01/2005 2:19:33 AM PDT by konaice
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To: XpandTheEkonomy

I have sympathy for their profit margin but this is insurance and while they accept our money, they never seem to like to pay out.


9 posted on 09/01/2005 2:20:28 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife
Yep, the ideal situation for insurance companies would be to take in all premiums and never pay out on a claim, which begs the question:Why have insurance at all if you can't use it without being cancelled?

I asked an insurance agent that once and he said "peace of mind." I didn't ask him how you could have peace of mind if using your insurance was going to cause you to lose it!

10 posted on 09/01/2005 2:47:24 AM PDT by calex59
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To: calex59

LOL. Wow. I am amazed at his honesty.


11 posted on 09/01/2005 2:57:25 AM PDT by spetznaz (Nuclear-tipped Ballistic Missiles: The Ultimate Phallic Symbol)
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To: calex59
I know.

A lot of people think twice about filing because it will raise their premiums. Then, when that "peace of mind" event comes along, you're canceled.
12 posted on 09/01/2005 3:07:49 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife

Historically-until the mid 20th century, these "desirable" ares of real estate had remained undeveloped and unpopulated precisely because of their propensity fro runs of violent weather.


13 posted on 09/01/2005 3:12:40 AM PDT by mo
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To: mo
Speculators are snapping up property in hurricane striken areas in Florida
14 posted on 09/01/2005 3:19:13 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife

Nationwide AIN'T on their side.


15 posted on 09/01/2005 3:39:17 AM PDT by fieldmarshaldj (*Fightin' the system like a $2 hooker on crack*)
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To: Cincinatus' Wife
I sold insurance in Florida for 28 years and had a very large book of business. I was in Clearwater (Pinellas) and Naples (Collier) In that 28 years my company Allstate)never cancelled any policies on a large scale such as this. We never had hurricanes of this magnitude in those years. I am not going to sit here and defend the companys but they don't have money trees and the only way they can stay in business is to get enough premiums to cover the operation. Any business you do business with could not continue in business if they didn't make money or a profit. How long would you stay in business if you continued to go into your savings to keep operating?

Insurance is the idea of spreading the losses over a large segment of the insureds,some have many losses while others do not have any losses, thats right, we all pay for the ones that use the policies over and over. My premium on my homeowner policy here in Pennsylvania has gone up quite a bit and I'm sure some of it is to help defray some of the costs of the couple of bad years in the hurricane belt.

16 posted on 09/01/2005 3:43:06 AM PDT by depenzz (My tastes are simple, I 'm always satisfied by the best)
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To: calex59
That's about it too. I had Allstate for 18 years. Got hit in Denver in my truck by a (most likely illegal alien) van that ran a red light (after the hit, they drove three blocks and fled). It was my first recordable accident to Allstate. Because I failed to chase down the the culprits. I paid their ridiculous jack up till I could switch companies - then dropped them for being a sorry P.O.S..

Wonder if State-farm will jack me around if I ever have to get in the battle ring with my insurer?
17 posted on 09/01/2005 3:47:04 AM PDT by Issaquahking
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To: Cincinatus' Wife
What needs to happen is stop building homes and businesses in areas prone to flooding and damage by these storms.

I for the life of me cannot understand why we have to subsidise rebuilding of places like New Orleans when we know this could happen again.

18 posted on 09/01/2005 3:50:10 AM PDT by Radioactive (I'm on the radio..so I'm radioactive)
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To: Radioactive

The 2004 ground zero for 2 hurricanes in as many weeks just happens to be the fastest growing city in Fl., on the top ten nationwide list, and is adding a turnpike interchange and an I-95 interchange to keep up with the massive population influx.

Go figure. :-)


19 posted on 09/01/2005 4:00:00 AM PDT by JoeSixPack1
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To: Cincinatus' Wife

Unfortunately this is true with any insurance.

Car insurance, health insurance, etc. You can pay in for years, but file a claim or come down with a serious illness and you risk being cancelled, or having your rates raised so high that you can't afford to keep the insurance.

Free market, I guess, but I've had friends have to "fight" with an insurance company about a claim but the insurance company had been more than happy to take money for years. As long as no claim was filed, there were no problems.

That being said, I have State Farm, live in a coastal region, and State Farm has continued to renew our policy and allowed us to up our coverage. And another insurance company we've had good service from is Geico. Have had a couple claims over the years because of accidents and they have been very efficient.


20 posted on 09/01/2005 4:01:30 AM PDT by dawn53
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To: dawn53

I've always worked with State Farm. But even they have their limits. After everyone started filing "black mold" claims in the Houston area after Allison, we received rewritten policies at renewal. You could accept or go elsewhere. The black mold scare was lawyer heaven. As usual lawyers have A LOT to due with how much we pay.

We're in Maryland now and only were accepted as a State Farm customer due to our long (and I'm sure not expensive to them) history. They'd stopped writing policies here due to tornado damage, as they had in Texas due to hurricane damage. They probably have started writing policies since then.


21 posted on 09/01/2005 4:19:27 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife
From The devil's Dictionary of Ambrose Bierce:

INSURANCE, n. An ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who keeps the table.

INSURANCE AGENT: My dear sir, that is a fine house – pray let me insure it.

HOUSE OWNER: With pleasure. Please make the annual premium so low that by the time when, according to the tables of your actuary, it will probably be destroyed by fire I will have paid you considerably less than the face of the policy.

INSURANCE AGENT: O dear, no – we could not afford to do that. We must fix the premium so that you will have paid more.

HOUSE OWNER: How, then, can I afford that?

INSURANCE AGENT: Why, your house may burn down at any time. There was Smith's house, for example, which –

HOUSE OWNER: Spare me – there were Brown's house, on the contrary, and Jones's house, and Robinson's house, which –

INSURANCE AGENT: Spare me!

HOUSE OWNER: Let us understand each other. You want me to pay you money on the supposition that something will occur previously to the time set by yourself for its occurrence. In other words, you expect me to bet that my house will not last so long as you say that it will probably last.

INSURANCE AGENT: But if your house burns without insurance it will be a total loss.

HOUSE OWNER: Beg your pardon – by your own actuary's tables I shall probably have saved, when it burns, all the premiums I would otherwise have paid to you – amounting to more than the face of the policy they would have bought. But suppose it to burn, uninsured, before the time upon which your figures are based. If I could not afford that, how could you if it were insured?

INSURANCE AGENT: O, we should make ourselves whole from our luckier ventures with other clients. Virtually, they pay your loss.

HOUSE OWNER: And virtually, then, don't I help to pay their losses? Are not their houses as likely as mine to burn before they have paid you as much as you must pay them? The case stands this way: you expect to take more money from your clients than you pay to them, do you not?

INSURANCE AGENT: Certainly; if we did not –

HOUSE OWNER: I would not trust you with my money. Very well then. If it is certain, with reference to the whole body of your clients, that they lose money on you it is probable, with reference to any one of them, that he will. It is these individual probabilities that make the aggregate certainty.

INSURANCE AGENT: I will not deny it – but look at the figures in this pamph –

HOUSE OWNER: Heaven forbid!

INSURANCE AGENT: You spoke of saving the premiums which you would otherwise pay to me. Will you not be more likely to squander them? We offer you an incentive to thrift.

HOUSE OWNER: The willingness of A to take care of B's money is not peculiar to insurance, but as a charitable institution you command esteem. Deign to accept its expression from a Deserving Object.


22 posted on 09/01/2005 4:21:47 AM PDT by Maceman (Pro Se Defendant from Hell)
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To: Issaquahking

I have been in one major accident and a couple of fender benders. One my fault, the others not. All with State Farm. Been with them over 10 years now. Very good service. They have been good to me.


23 posted on 09/01/2005 4:26:32 AM PDT by Huck (Looting makes GREAT television.)
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To: Maceman

Thanks for the post!


24 posted on 09/01/2005 4:28:47 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife
I have sympathy for their profit margin but this is insurance and while they accept our money, they never seem to like to pay out.

It's not a matter of profit margin, but survivor ability. The majority of insurance companies do not mind paying out what they rightfully owe. However, a company simply cannot afford to pay out far more than its total assets. I do not remember if it was 10 miles further up or down the coast, but that if Andrew would have hit both State Farm and Allstate would have gone out of business. A company simply cannot put all of it's risk in one area. It owes the other policyholders throughout the country coverage, and not those who choose to live in high risk areas.
25 posted on 09/01/2005 4:46:50 AM PDT by GarySpFc (Sneakypete, De Oppresso Liber)
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To: GarySpFc

I understand.

But they wait until a disaster to complain.


26 posted on 09/01/2005 5:01:20 AM PDT by Cincinatus' Wife
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To: Huck; dawn53

Thanks.


27 posted on 09/01/2005 5:07:58 AM PDT by Issaquahking
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To: Cincinatus' Wife
As wary as insurers are they simply cannot see everything which can possibly happen. I remember it was in 1990 the company I am an agent with became aware of the danger poised from an earthquake by the New Madrid fault in southeastern Missouri. The exposure was so great the company had to stop writing business within 100 miles, and cut back on the business it had there. If that quake ever goes off many insurers in the U.S. will likely cease to exist.
28 posted on 09/01/2005 5:09:53 AM PDT by GarySpFc (Sneakypete, De Oppresso Liber)
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To: GarySpFc

That's understandable.

There is no perfect solution but I don't think insurance companies want to lose clients either.

At some point there is no gamble and then there is no profit.


29 posted on 09/01/2005 5:24:01 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife
Old jingle: Nationwide is on your side.

New jingle: Nationwide is on the run!

30 posted on 09/01/2005 5:25:37 AM PDT by Petronski (I love Cyborg.)
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To: Petronski

That was going through my head too.

LOL


31 posted on 09/01/2005 5:33:15 AM PDT by Cincinatus' Wife
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To: calex59
I always go with the highest possible deductibles. When I file a claim, I want it to be a doozie.
32 posted on 09/01/2005 6:03:24 AM PDT by beef (Who Killed Kennewick Man?)
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To: Cincinatus' Wife

I live in Pasco county. A raise of 28.9% would have been great.

I haven't had time to figure out the exact percentage, but my raise this year was over 100%. Not because I had a claim - I never have claimed here in FL.

I was dropped by my insurance company for owning a German Shepherd.

Lord help me. I owned a German Shepherd where it rains a lot. I'm wicked, wicked.


33 posted on 09/01/2005 6:09:25 AM PDT by I still care (America is not the problem - it is the solution..)
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To: I still care

You bad.


34 posted on 09/01/2005 6:14:18 AM PDT by Cincinatus' Wife
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