During this financial crisis, we are seeing something they should see in our lives - broken promises of large companies and government entities to never considered possible scale. We have reached a point where even large companies and large states like Florida can not meet its obligations on bond markets.
If you are in Florida home insurance consumer, your biggest asset is now at risk during the financial crisis - at his home in Florida.
Can you name a sacred promise that a home insurance company for you when you take your money and commitment to ensure your home?
When buying home insurance in Florida the insurance company promises a prompt and fair payment of your claim. Florida insurance companies buy reinsurance to help them make good on this promise to you. Reinsurance is backup coverage that insurance companies buy to help you protect yourself against big losses above certain levels.
The Florida Hurricane Catastrophe Fund was formed as a way to help stabilize the property insurance market in Florida after Hurricane Andrew caused billions of dollars in damage to Florida in 1992. By offering affordable reinsurance fund has contributed to the insurance available and affordable for years to the owners.
All that changed after the Florida hurricanes of 2004 and 2005, when the Florida home insurance has become very expensive and hard to find again.
The legislature responded to the Florida home insurance crisis in Florida, the vote in 2007 to develop reinsurance sold by the Cat Fund to $ 12 billion - increase its overall risk to a total of $ 28 billion. Home insurance companies in Florida that were required to purchase additional reinsurance from the state and to pass the savings on reinsurance for homeowners.
Now Florida Catastrophe Fund told us that markets frozen securities will not be an acceptable source to raise the money they need to meet their commitments to insurance companies after a major hurricane in Florida. What does all this mean for you as a Florida home insurance consumer?
You do not receive the emergency rate than expected and state assumed financial obligations without hope of pay.
You are at risk if Florida is experiencing a major hurricane in the next year. Since losing his business property insurance in Florida exceeds certain levels, your company will ask the Florida Cat Fund to pay to pay your claim. Since the Cat Fund Florida is short of money, you can be a long delay in getting your claim paid.
The promise to pay your claim Florida home insurance has never been more at risk than it is today.
Now that you know that the Florida Cat Fund can not meet its obligations, we will examine the idea of a national hurricane catastrophe fund some Florida lobbied in Washington for many years. This national cat fund would provide an extra layer of protection against losses above and beyond the requirements of the Florida Cat Fund.
The theory is a national catastrophe fund would be partly financed by insurance premiums paid by policyholders in states that are part of the background. National Cat Fund is a segregated fund that earn interest and grow over the years that there are no claims.
Proponents argue that taxpayer money would be needed to support a National Cat Fund. Just ask anyone in Washington to show the billions that are supposed to be in the Social Security Trust Fund. Even President-elect Obama will shy away from any additional federal obligations as it faces any red ink in Washington today. So do not look to the federal government to enforce the promise that was made to pay for their Florida home insurance claim.
Finally, the Property Insurance Corporation citizens has always said it does not have nearly the money you have to pay nearly half a trillion dollars in exposure to hurricanes after a major hurricane in Florida.
A major hurricane would mean that citizens can not even afford their primary obligations - those who must pay before losses reach levels where the kicks funds Catastrophe Florida reinsurance hurricane and as a borrower with citizens, you are required to pay more special high notes. After a major hurricane in Florida that policyholders have a private landlord insurance - Special charges attached to your annual insurance bill.
In this new world where even governments can not keep their promises, here are some steps that you should take a consumer home insurance in Florida now:
Get a wind inspection in Florida made and harden your home as much as possible.
Citizens Insurance Florida Avoid if you can.
Find an insurance company of the home that is financially strong and spread your risk both in Florida and other states. Inform your insurance claim on the same day that the hurricane in Florida. This will make it more likely that you will be paid before your insurance company looks at the cat fund in Florida for repayment.
The fact that the Fund Cat Florida is short of money was not lost on home insurance companies in Florida. This means that insurance companies do not receive what they paid.
You should expect home insurance companies in Florida to try to buy more of their reinsurance in the private market and not the state of Florida in 2009. While home insurance crisis continues Florida, has never been more important for you to stay on top of the home insurance market in Florida to private insurance. You never know when you might find a new Florida home insurance company.
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