Home insurance rates finally dropping
Jul 2, 2008
Treasure Coast Palm--July 2, 2008
By BY JULIE PATEL Sun-Sentinel
When Ron Wise learned Nationwide Insurance dropped the coverage on his Palm Beach Gardens home this year, he figured he’d be lucky to find another insurer.
Not only did he find another carrier, he’s now saving 26 percent on his annual premium.
Nine of 10 local insurance agents who spoke with the South Florida Sun-Sentinelrecently said most of their customers’ yearly property insurance premiums have dropped 15 to 40 percent this year.
It’s too early to tell whether the tide is finally turning on the state’s property insurance crisis, but industry experts say lower rates — and 23 new private insurers since 2006 offering homeowner coverage — are good signs. In some cases, the new insurers’ cheaper prices are forcing the larger, established insurers to cut rates to stay competitive.
Overall, property insurance prices have "gone way down," said Pat McNamara, the business development manager of Burke, Bogart & Brownell, a Boca Raton-based insurance agency. "I think rates are probably down below where they were prior to the hurricanes" of 2004 and 2005.
But new private insurers carry risks, insurance industry observers say. The cheaper premiums mean insurers have less money to pay customer claims. And the upstart carriers haven’t been through a storm, so property owners don’t know how reliable they’ll be.
Some owners of older homes near the coast said they’re sticking with the Citizens Property Insurance Corp., which the state formed to be the insurer of last resort but has grown to be the state’s largest property insurer.
"There’s a lot of competition right now. People have choices," said Anita Byer, president of Plantation-based Setnor Byer Insurance & Risk. "Whether they want a startup that hasn’t experienced a storm and that we can’t verify how well they’ll weather a storm … that’s something to think about."