New requirement for Citizens flood insurance effective 4/1/23


Citizens Insurance is a Florida-based state-run carrier insuring residential and business properties all over the state. They used to be considered the insurer of last resort in Florida but have taken on more home policies than ever in the recent past so this news will be very impactful to many.
A new bill recently took effect that outlines some important changes regarding the requirement of flood insurance on Citizens home insurance policies. It states that Citizens personal lines residential policyholders must secure and maintain flood insurance that meets certain guidelines in order to be eligible for Citizens coverage at all.
The bill provides the following timetable for which flood insurance coverage must be implemented for personal lines residential Citizens policyholders:
  • For risks located in areas designated by the Federal Emergency Management Agency as special flood hazard areas, flood insurance must be secured for new Citizens policies with an effective date on or after April 1, 2023, and at renewal for Citizens policies that renew on or after July 1, 2023.
  • For all other risks, regardless of flood zone, the requirement to obtain flood insurance at policy issuance or renewal is effective:
  • March 1, 2024: policies insuring property for $600,000 or more
  • March 1, 2025: policies insuring property for $500,000 or more
  • March 1, 2026: policies insuring property for $400,000 or more
  • March 1, 2027: all other policies

 

This comes as a big change for Citizens policy holders that may not currently have flood insurance. For additional information or resources on flood insurance, please reach out to us anytime.

5 Major Changes to Home Insurance in 5 Years


Home insurance is an ever-changing topic of conversation – sometimes positive and sometimes not so much. The last five years and the next five years to come have been and will be HUGE to the property insurance industry, thus impacting real estate drastically. Here is a recap of what we’ve seen and what we expect.

THE PAST FIVE YEARS:

  • Litigation and fraud increased more than ever before, driving premiums up and causing at least 10 companies to go out of business or stop writing in Florida
  • Underwriting guidelines became the most strict we’ve ever witnessed… roofs have to be as new as 7 years old with some companies and risks are scrutinized with extra inspections and requirements
  • It is estimated that since 2017, the four storms that hit Florida (Irma, Michael, Ian and Nicole) cost over $160 billion with a net loss for Florida property insurers of $3 billion… causing insurance carriers to be unprofitable and reinsurers to question their risk appetite
  • Homeowners are seeing rate increases of over 50%
  • Policies, because they’re hard to come by, may be lacking coverage from what is typically recommended

THE NEXT FIVE YEARS:

  • Citizens is no longer the “insurer of last resort†and is writing more business than ever, but will soon be requiring flood insurance on all policies, regardless of flood zone risk level
  • The process of Assignment of Benefits (AOB) is no longer allowed for contractors to obtain rights to manage claims for the insured via a signed form
  • One-way attorney fees are no longer permitted so the astronomical payouts from insurers will diminish significantly
  • Two reinsurance funds were created in special session in 2022, which will help carriers still take on exposure
  • We expect in the next 2-3 years, premiums will begin to level out and come down some… although rates will remain competitive since there aren’t as many carrier options, our hope is that they come down a reasonable amount

It’s been a while since there was “good†news in the property insurance world but all of these are steps in the right direction that we can all be excited about. The end goal is to make insurance available and affordable for all Florida homeowners again.

New IRS guidelines for employees’ family members to receive health insurance premium assistance


The state of the health insurance market is constantly changing and those that are business owners or group plan administrators have seen how difficult it can be to keep up and remain compliant. We are committed to helping everyone stay informed to take good care of their employees. Most recently, as of October 11th, there were new guidelines released from the Internal Revenue Service (IRS) regarding premium tax credits for individuals that may not be the right fit on an employer-provided group health plan.

This change is intended to fix the so-called “family glitch†by extending marketplace subsidies to an employee’s household members that may not have been eligible before. In the past, eligibility was determined by whether or not the premium for single group medical coverage offered to an employee was affordable. Now, it is based on whether the premium for a FAMILY group medical coverage is affordable. For example, if the family plan offered by the employer to an employee is not affordable for them, their spouse and children may be eligible to receive a subsidy and the employee can remain on the group plan.

Subsidies are determined by the Marketplace, established by the Affordable Care Act, and are based on total household income. The plans, as far as coverage, remain the same but the premium may be discounted in tiers depending on their income level. This is reevaluated every year based on their projected income and tax filings.

So what does this mean for an employer? It doesn’t change anything for the group plan administration but it does provide another option for employees’ family members to obtain health care coverage that they can afford. Because this new regulation is focused on the family members of employees, it does not change anything with mandates for large employers to offer coverage to employees or their family.

If you are an employer that offers health insurance benefits, we recommend sharing this information with your team. We are happy to help guide them through the individual health insurance market, should they choose to pursue it for their spouse and/or children. Here is a copy of this new regulation if you’re interested in reading more.

What does the stormy season of 2022 look like and how can you prepare?


As if there isn’t enough going on with Florida home insurance these days, we are now upon hurricane season. NOAA forecasters have estimated there to be a 65% chance that this year will have “above average†activity, which would make it the seventh consecutive year of unwanted overachievements.

For the 2022 hurricane season, they have forecasted a range of 14 to 21 named storms (winds of 39 mph or higher), of which 6 to 10 could become full blown hurricanes (winds of 74 mph or higher). This includes 3 to 6 major hurricanes (category 3, 4 or 5; with winds of 111 mph or higher).

So what can you do? How can you best prepare and if in the process of a real estate transaction, avoid closing delays or lost deals? We can’t stress enough the importance of starting the insurance process early. This is helpful even outside of hurricane season because underwriting guidelines have tightened up and things can take time like inspections, appraisals, remedying any issues, etc. But the idea of starting early is more important than ever when it’s stormy season. If there is a named storm headed our way or posing as a threat to our area, insurance carriers will begin binding suspensions. This means that any policies in the quoting status cannot be bound… regardless of closing requirements.

Here are a few other quick tips to help you prepare:

  • Trim trees and pick up any lawn debris
  • Double check the “Other Structures†coverage on your homeowners policy
  • Be sure you understand your hurricane deductible, it’s oftentimes different
  • Purchase household items, food, and water for an emergency backup kit
  • Be prepared to document and mitigate any damage

We are hopeful for an uneventful storm season so we can focus on the positive change we’re seeing with property insurance reform but if you need anything or have questions, we’re here… in all kinds of weather.

 

Property insurance reform bill passes in special session


The property insurance reform bill that was under review in the Senate’s special session this week has passed! It received our Governor’s signature and is yet another step in the right direction to making home insurance available and affordable again.
More details on what this bill entails can be found here but the following points are what we consider to be the most important:
  • Reinsurance assistance for insurance carriers that results in reduced premiums for consumers
  • Policies cannot be refused or non-renewed solely because the home’s roof is less than 15 years old, contingent on an inspection confirming that there are at least 5 years of life left on the roof
  • Limitations on attorney fees and fee multipliers
  • New roof deductible options
  • More Office of Insurance Regulation guidelines to help prevent Florida-based carriers from financial instability or liquidation
  • Roofs with less than 25% damage can be repaired, rather than requiring full replacement
  • Steps to curb fraudulent roof claims and roofing contractor solicitation
  • Grants and tax exemptions for wind mitigation efforts

This bill received its final stamp of approval from Governor DeSantis, who stated that this package is “the most significant reforms to Florida’s homeowners insurance market in a generation.â€

We remain hopeful and excited for positive change. We are in this together and ultimately, want to keep homeownership as great of an experience as possible for all Floridians.