The South Florida Sun-Sentinel reports today that Nationwide Insurance Company will no longer offer new homeowner policies to Floridians. Nationwide is the eleventh in a long line of insurance companies that are bailing out on Florida homeowners in the wake of last year's hurricanes.
Company spokesman Joe Case says "Even with rate increases, you have other pieces of the puzzle that are always changing [in the insurance market]. That demands a continuing evaluation of our business strategy."
As a Florida resident, may I say: What a load of crap.
Florida hurricanes are not exactly unheard of events. The Sunshine State has gotten pummeled for longer than scientists have been tracking storms so this "piece of the puzzle" has never "changed". If Nationwide chose to overlook or ignore the potential for repeated hurricane strikes in one season, that is their problem, not ours. Insurance companies have been content to take our money for years and we have been willing to pay for all the extra riders they insist upon: wind, flood, hurricane, etc. Now that Florida presents a risk to their bottom line, these companies are out the door faster than you can say "Category Four."
The departure of these companies from the homeowners market means residents will now be forced into the hands of smaller insurance companies known for their sky-high rates. Many private companies would be unable to absorb the financial impact of a hurricane season similar to last year's so insurance coverage becomes a very shaky situation for everyone concerned. Homeowners pay top dollar for coverage and then lose sleep wondering if they'll be reimbursed in the event of a loss. Small companies take these payments and then lose sleep worrying if they can cover the bills in the event of widespread hurricane damage. Meanwhile, companies like Nationwide simply pick up their toys and go home after years of promising they're "on our side."
To add insult to injury, Case goes on to say that his company will continue to offer automotive coverage because "it's a different kind of risk." It sure is, Mr. Case, if you equate "different" with "minimal." It's a lot more palatable to cover the loss of an $18,000 car than a $200,000 home, isn't it? Situational ethics might be in Nationwide's vocabulary, but it isn't in mine.
Insurance companies have an inherent responsibility to provide a level of comfort to the policyholders whose money they take. To abandon Florida residents simply because they suddenly don't like the playing field is careless and undermines the very business model they hope consumers will buy into. With eleven insurance companies pulling out of Florida in just the past few months, many residents are openly wondering about the value of having insurance in the first place if it won't be there when you need it most.
I have not been personally affected by the insurance companies who are running across the state line with their tails between their legs. Yet. I'm covered by one of the few companies still willing to insure Florida homeowners but I hold my breath every time I walk to the mailbox. I'm sure it's just a matter of time before I get a letter telling me that my insurer is taking a hike too.Powered by Sidelines