OPINION: Watchdog: Cheaper insurance does exist

Apr 3, 2008

Florida Today–Apr. 3, 2008

Rockledge insurance agent Carl Moulton is selling more homeowner’s insurance lately but making less money from it.

More people are shopping, if involuntarily. And premiums for many are dropping — along with agents’ commissions.

Credit a host of new companies with lower prices than the giants who have canceled thousands of policies. Credit the mild rate cuts mandated by the Legislature. But mostly, Moulton says, credit the deep discounts insurers must offer owners who inspect and “harden” their homes.

“If someone is just looking for price, they’ll find it,” says Moulton, head of independent Brevard Home Insurers.

He proves it with data from policies now on his desk. A Rockledge homeowner whose annual premium dropped from $1,168 to $797. One in Melbourne whose bill dropped from $1,495 to $797. Both obtained discounts and have a new carrier, St. Johns Insurance Co.

Some companies might actually charge too little, cautions Moulton, who thinks big about his industry’s health. He isn’t sure he likes the trend.

I’m pretty sure I do.

Price a priority?

If you want to pay less for insurance, it’s time for you to act. You, the consumer. Not Charlie Crist or the Legislature. You.

What to do:

# Shop around. Grab the phone book and call for a quote from an independent agent, not one of the big brand names. It’s easy. The independents sell policies from the host of new arrivals including Universal, Security First, St. Johns, Cypress, Edison and Olympus. Online, you can go to FloridaHomeInsurers.com to get quotes.

# Get your discounts. No, you didn’t automatically qualify for them when you described your home to your agent. You have to get an inspection, which can be free, and send a separate form to your insurer.

Besides shutters, you can save hundreds per year based on the shape of your roof and materials used to build your home — stuff you don’t have to change. To get started, call your company or go online to MySafeFloridaHome.com.

# Review your replacement values. On your policy, they’re the dollar amounts listed for your dwelling, personal property “and other structures.” If they’re too high, you’re paying too much.

One way to know: If your dwelling value looks like market prices in your neighborhood, it’s too high. When you rebuild, you don’t have to pay again for the land, utilities, impact fees or sales commissions. And construction costs aren’t higher beachside, especially not now.

Shedding policies

Meanwhile, let’s be clear about what’s happening with the big boys: State Farm, Allstate, Nationwide.

After years of enjoying huge shares of a captive market, they have shed thousands of policies to cut exposure in a political scene where they can’t name their price. If you’ve been “dropped,” you now realize that insurance isn’t a relationship, it’s a year-to-year contract.

Some name brands have deals to steer clients to companies that are scooping up their business. Allstate sends people to Royal Palm Insurance. Nationwide has referred to Security First. State Farm agents don’t have a deal, and refer people to Citizens.

Says Gail Warren, owner and agent of independent Suwannee Insurance on Merritt Island: “There are better opportunities than Citizens with companies that have good financial backgrounds.”