A guest post by Greg Hemming of Certified Insurance Services. He can be reached at 407-215-7318 or email@example.com
How many of us want additional fees to be levied to our homeowner policies to pay for the failed management of other homeowner companies?
Effective January 14, 2008 for most insurance companies, a third Florida Insurance Guarantee Association (FIGA) assessment will apply to new business, endorsement, and renewal premiums.This surcharge, 1.5% of written premiums, will be charged until the insurance company has recouped the assessment already paid to FIGA.
There are now a whopping total of six assessments that are being charged to insureds. All insurance companies are subject to assessments, as required by state law. Any future significant storm activity will likely result in companies passing along additional assessments from Citizens Property Insurance Corporation, FIGA, and/or the Florida Hurricane Catastrophe Fund.
These are not “premiums” since insurance companies do not get this money, and agents do not get commission on it, but many consumers may not realize that this cost is not for their insurance, but actually constitutes a subsidy for others. As an example, the FIGA assessments are for claims ultimately not paid to Florida policyholders by liquidated insurance companies.
The six assessments that are being charged to home policies are:
1. Florida Insurance Guarantee Association 2006 Assessment.
2. Florida Insurance Guarantee Association 2006 Special Assessment.
3. Florida Insurance Guarantee Association 2007 Assessment.
4. Citizens Property Insurance Corporation 2005 High Risk Account Regular Assessment.
5. Citizens Property Insurance Corporation 2005 High Risk Account Emergency Assessment.
6. Florida Hurricane Catastrophe Fund Emergency Assessment.
The above, as applicable, will be detailed on the Declaration Page of the respective policies. The latest FIGA assessment should be displayed as: Florida Insurance Guarantee Association 2007 fee.
These fees average over $100 on most policies. The higher the premium costs on the policy then the higher the fees to be paid. While companies strive to lower rates the fees keep on coming and these fees don’t go away easily until completely recouped.
Purchase your insurance from reputable companies with adequate reserves and encourage others to do so as well so we can all avoid paying for failed companies and their failed business strategy.