The Anna Maria Island Sun Newspaper

Vol. 11 No. 28 - April 13, 2011


Insurance looms larger than hurricanes

We haven't even gotten through income tax day and we have to start worrying about hurricanes again. The ironic thing is that the insurance we need to protect us against those hurricanes is a bigger problem than the actual hurricanes.

Citizens Property Insurance Corp. is in the news again in a big way. The Florida Legislature has introduced a bill (HB 1243) intended to raise rates on the state-owned Citizens. The company currently insures nearly 1.3 million properties and although intended as the insurer of last resort, has morphed into the primary insurance carrier for coastal properties in the state and the largest property insurer.

The bill proposes that Citizens should be allowed an annual increase in premiums by up to 25 percent, but not more than a 20 percent statewide average. In addition the bill calls for not insuring homes valued at more than a $1 million as of Jan. 1 and then by 2016 eliminating coverage for homes valued at $500,000 or more. The only way these homeowners could obtain a Citizens policy is if the only policies they could find cost 25 percent more than Citizens.

The Republican legislators and Gov. Rick Scott, who are supporting the bill, contend that this is the only way to get private insurers back into the Florida market. Many of these insurers left the state in the turmoil of the busy 2004 and 2005 hurricane season and have not returned, leaving Citizens to pick up uninsured properties.

Private insurance companies say they can't compete with Citizens' low rates, and the backers of the bill say the rates being charged by the state-run pool don't nearly cover the risks. In 2007 Citizens' rates were frozen until 2010 when rates started going up, but they have been capped at a statewide average of 10 percent. Even with this increase in premiums by Citizens most industry experts and officials agree that Citizens is actuarially unsound.

Critics of the bill cite the inability of many coastal residents to be able to pay any increase in premiums and the negative effect on the slowly recovering real estate market. Sen. Alan Hayes, one of the bill's supporters, says "It's dead wrong to perpetuate the life of Citizens; we've got 85 percent of the people of Florida on the hook so that 15 percent of citizens can have insurance."

Anna Maria Island is smack dab in the middle of this latest insurance controversy. With every property on the Island in a coastal region and our real estate market's recovery in full swing there is a lot at stake. On the one hand allowing Citizens to continue to grow by keeping premiums artificially low never solves our insurance issues. On the other hand no one wants to see insurance premiums go higher and higher every year hoping that private carriers will eventually create a competitive marketplace.

It's sure tempting to go without homeowners insurance as many coastal residents have done and simply self-insure against a storm. But if you have property with a mortgage or intend to purchase a waterfront property with financing, you don't have that option. Right now most Florida residents are probably more worried about their insurance premiums than the weather forecast; at least until the first tracking cone appears on their television screens.

Real Estate Transactions
Real Estate Transfers from Jan. 1 to 31, 2011
Sponsored by Alan Galletto Island Real Estate

Sold Date | List Price | Sold Price | Address | Provision | Property Style

Anna Maria

01/21/2011 329,000 310,000 612 North Bay Blvd None SF Res
01/25/2011 1,474,000 1,050,000 103 SeaGrape Ln None SF Res

Bradenton Beach

01/31/2011 179,900 152,500 611 Gulf N Dr # D23 None Condo Res
01/14/2011 299,000 280,000 244 17th St N # 25 None Condo Res


01/27/2011 169,000 150,000 4227 126th W St None SF Res
01/24/2011 749,000 722,000 12519 Safe Harbor Dr None SF Res
01/21/2011 736,800 728,800 12310 BayPointe Ter Reo/Bank Own SF Res

Holmes Beach

01/18/2011 244,700 222,000 3402 Sixth Ave # 3 None Condo Res
01/21/2011 275,000 250,000 6400 Flotilla Dr # 11 Short Sale Condo Res
01/28/2011 349,000 310,000 6200 Flotilla Dr # 293 None Condo Res
01/20/2011 334,900 304,000 6313 Gulf Dr None Condo/TH Res
01/12/2011 699,900 500,000 5808 Gulf Dr # 109 N None Condo Res
01/05/2011 475,000 425,000 526 70th St None SF Res
01/21/2011 498,900 475,000 213 70th St None SF Res
01/14/2011 575,000 570,000 206 55th St None SF Res
01/28/2011 619,000 580,000 309 68th St None SF Res
01/14/2011 1,999,000 1,775,000 717 Key Royale Dr None SF Res
01/31/2011 359,000 345,000 307 63rd St None Duplex Inc
01/21/2011 1,000,050 1,000,050 534 70th St Cash Vacant Land


Source: Manatee County Property Appraiser’s Office

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