"NO MORE POLICIES"

Home owners in South Florida have been through alot over the past few two years. Along with the meteoric rise in values came fourteen hurricanes and the damage that came with them, not to mention the almost doubling of taxes and insurance costs.

Not totally unaware of the fourteen hurricanes are the insurance companies that cover our homes against damage. They have amassed substantial losses and it has come to the point that many are simply calling it quits- miami herald story .

For those of you that are not familiar with the situation in South Florida, since 1992 and Hurricane Andrew, ( which wiped out multiple insurance companies and), if you wanted to insure a home and were not already covered you most lkely had one choice- the state run pool. This was the sole insurer writing new polices for years. Over the years the state run pool sold off some policies to private companies and some private insurers started to write new policies but for the most part it was the state assuming all of the risk.


Fast forward to 2004-2005. Florida suffers numuerous category 3,4, & 5 hurricanes causing billions in damage and millions in losses for the insurance companies that cover the homes hit by these storms. Now the 2nd largest insurer in Florida has thrown in the towel.

"Losses from the 2004 and 2005 hurricanes have depleted the financial resources for Poe Financial Group, the second-largest insurer in South Florida. Its companies will not be writing new policies in the state."

"Poe's exit leaves consumers few options, said Alex Soto, president of InSource, a Dadeland insurance agency. Insurers' unwillingness to take on new policies in the state will force yet more homeowners into Citizens Property Insurance, the state-run pool of last resort that is already South Florida's largest insurer."

"Poe Financial said the move was necessary because it is facing more than $2 billion in losses and more than 125,000 claims from the 2004 and 2005 hurricane seasons."

"Two of Poe's units, Atlantic Preferred and Florida Preferred, don't plan to cancel existing policies. Poe, based in Tampa, also said both companies will continue paying claims."

It gets worse, "A third company, called Southern Family, will cancel homeowners and business policies as they come up for renewal. This is bad news for condo associations -- Southern Family was just one of three companies writing association policies since the 2004 storms. Those policies typically cover building structures."

"Without these three companies providing coverage, it's likely many South Floridians will end up finding coverage only from Citizens, which is required to charge the highest rates in the state."

"Bob Poe Jr., the parent company's vice chairman and president of Southern Family, told The Palm Beach Post that the hurricane losses put the companies below the state's minimum capital requirements."

People have had their insurance premiums almost double over the past three years. Now some may find that they have no choice but to be covered by an underfunded state run pool at the highest rates allowed, which will again increase their premiums. Imagine being a new buyer, with an I/O loan about to reset, paying double the taxes and now a huge increase to insure the property. Reality is about to set in and set in hard for alot of home owners.