Your Florida home insurance company should have been intensified in the last three years, the mild hurricane season. However, there are more than 50% chance it is not.

Despite this latest phase of the mild hurricane season, the financial stability of companies in many Florida home insurance is facing serious difficulties. More than half of the companies actively seek new business in Florida lost money last year. Three companies are completely failed and had to paid by the State. One of the companies, not new business in only 12 counties on the coast further south in the state. Why are these companies and why it is not that so many companies to lose money?

For starters, the Florida home insurance rates have been kept artificially low by the state for the last three years by the legislature. Although it was politically popular with voters for the low prices on the poor financial situation of the company are contributed. Florida insurance companies implementing – the largest in the country provides a benchmark for market rates. Because he does not have enough charge for their reporting private companies are required to maintain low prices – if they lose money or not. The newly formed company that must make the policy of insurance company operating condition to ensure their policies to run on or under the state-owned enterprises price almost, they lose money at the beginning.

There was also an increase in non-hurricane claims and reopening hurricane before. The economy is a factor difficult, because everyone who suffers a loss when the time is hard to apply more in the current context. Florida home insurance companies also some fraudulent claims and questionable to buy known. The fraud may be given to use during normal rain storms money to repair a roof exceeded. It could also include claims suspicious fire and theft claims from home burglaries, the items of value that the owner ever owned. Finally, there was an increase in claims from hurricanes and new re-open the storms of 2004/2005, immediately following the collapse of a company that had done its reinsurance coverage exhausted.

Last but not least, investment income declined sharply. Florida home insurance companies are constantly looking for ways to generate a reliable return on their surplus funds. It is not for fund managers to do with the poor state of financial markets easy. The return on investment and low risk-free very low in this slowing economy with low interest rates. Looking for places to invest excess liquidity with returns could result in unacceptable risks. After all, it is impossible to say for a company that he can not pay a claim because it lost money in the stock market acceptable.

Your first reaction to the poor performance of these companies could be very little concern. For why should you do if an insurance company makes money? Even if you are the greatest enemy of the insurance companies were born, it is always to make a reasonable profit for your company important – especially in years where there are no hurricanes. Those years will come a time when these companies to take a far more premium to be paid and a lot less to complete. should send the fact that this is not the case for most companies, the alarm bells in the entire state of Florida.

You said that the big insurance companies are bad, and maybe some of them. But it is the latest, most small businesses home insurance that can not earn money in these years of non-hurricane sweet. These companies are the future of home insurance in Florida. If it is not even a minimum of money over the years, not hurricane, are not expected to be there to pay your claim after the next hurricane in Florida.

If you try to find a new home insurance company in Florida, this is not the time of the purchase price. You must do your research. If you buy only the policy of low prices, you will receive a financial emergency, if your business stops operating and must be supported by the state.

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