Andrea Massie Aitken, Insurance Advisor.

I've spent a lot of time explaining to homeowners that there really is no such thing as a "flood zone" in Florida, the state of Florida IS a flood zone. This is an informative article from Burns & Wilcox that supports that way of thinking.

Linked In, 03/20/2024
Report: Increasing Number of Homes Face Severe, Repetitive Flood Losses
A growing number of homes covered by the National Flood Insurance Program are experiencing severe and repetitive flood losses, according to data from the Natural Resources Defense Council. The number of homes categorized as severe repetitive loss properties — meaning they have either had four or more separate building or contents claims of over $5,000, or two or more separate building-only claims exceeding the value of the property — has grown almost 20% since 2020, Property Casualty 360 recently reported.

Of those properties, about 20% are located in areas considered lower risk for flooding based on Federal Emergency Management Agency maps. It is not a surprising figure, given the overall trend of more floods occurring in areas previously considered low risk, said Brad Turner, Vice President, National Product Manager, Flood, Burns & Wilcox, Morehead City, North Carolina.

“That number is growing quite a bit,” Turner said. “A lot of properties are a lot more exposed than individuals have an awareness of.”

This was evident in recent weeks as the state of California saw record amounts of rainfall due to an atmospheric river that led to hundreds of mudslides and up to $11 billion in economic losses and damages, much of which will not be covered by insurance because most homeowners in the state do not carry Flood Insurance, CNN reported. Further rainfall put millions of California residents on flood watch as of Feb. 20, and experts say climate change could play a role in these storms becoming more frequent or intense.

As we begin 2024 and I begin my own new venture, I'd like to repost an article from Linked In published earlier by Cybersecurity Expert Ismail Abdur-Rahman. I find it ironic that his expertise is something business owners have to incorporate into their daily regiment in protecting their customers and business. At the same time, the effort and cost is worthwhile, because the contribution small businesses add to our country is essential. So we roll with the changes and seek the rewards! I hope this read sets you in motion for your 2024! Happy New Year.
Ismail Abdur-Rahman, Linked In. February 22, 2023.

Small businesses are the lifeblood of the US economy. They make up the majority of businesses in the country and employ a significant portion of the workforce. In fact, small businesses are responsible for creating two-thirds of new jobs in the United States. Despite their importance, small businesses often face significant challenges that can hinder their success. In this blog post, we'll explore the critical role small businesses play in the US economy, the challenges they face, and the importance of supporting them.
The Importance of Small Businesses
Small businesses are the backbone of the US economy. According to the Small Business Administration (SBA), there were over 31 million small businesses in the US in 2020. Small businesses make up 99.9% of all businesses in the country and employ nearly half of the private-sector workforce. These businesses are essential to the economic vitality of local communities and the country as a whole.
Small businesses play a vital role in driving innovation and economic growth. They are often the first to introduce new products and services to the market, which can lead to increased competition, job creation, and economic growth. Small businesses also contribute to the diversity of the US economy, offering a wide range of products and services that cater to different markets.
One of the most significant contributions of small businesses is job creation.

Small businesses are responsible for creating two-thirds of net new jobs in the US. This job creation is critical for the US economy, as it provides employment opportunities for people across all levels of education and experience. Small businesses also help to reduce unemployment rates and stimulate economic growth by increasing consumer spending.
Small businesses also play a critical role in promoting economic resilience. During economic downturns, large corporations often lay off workers and cut costs to maintain profitability. However, small businesses are better equipped to weather economic downturns because they have lower overhead costs and are more agile in responding to changes in the market. In fact, during the 2008 financial crisis, small businesses were responsible for creating 67% of new jobs.
Challenges Facing Small Businesses
Despite the critical role that small businesses play in the US economy, they face significant challenges that can hinder their success. One of the most significant challenges facing small businesses is access to capital. Small businesses often have limited financial resources, making it difficult for them to access funding to grow their businesses. This lack of capital can limit their ability to hire new employees, expand their operations, or invest in new technology.
Small businesses also face regulatory challenges. Regulations can be complex and difficult to navigate, particularly for small businesses that may not have the resources to hire a legal team. These regulations can include taxes, licensing, and permits, among other things. Failing to comply with these regulations can result in costly fines and legal fees, which can be detrimental to small businesses.
Another significant challenge facing small businesses is competition from larger corporations. Large corporations often have more significant financial resources and economies of scale, allowing them to offer products and services at a lower price point. This competition can make it difficult for small businesses to compete, particularly in crowded markets.

Finally, small businesses also face challenges related to staffing and talent management. It can be challenging to attract and retain top talent, particularly in industries with high demand for skilled workers. Additionally, small businesses may not have the resources to offer the same level of benefits and compensation packages as larger corporations.
Importance of Supporting Small Businesses
Given the critical role that small businesses play in the US economy, it's essential to support them. Supporting small businesses can help to create jobs, stimulate economic growth, and promote economic resilience. Here are some ways that individuals and governments can support small businesses:
Shop Local: One of the easiest ways to support small businesses is to shop locally. By purchasing goods and services from small businesses in your community, you can help to stimulate the local economy and support the growth of small businesses. Shopping local also helps to preserve the unique character and culture of your community, as small businesses often offer unique products and services that can't be found elsewhere.
Invest in Small Businesses: Another way to support small businesses is to invest in them. There are various investment options available to individuals and institutions, including small business loans, equity investments, and crowdfunding. By investing in small businesses, you can help to provide them with the capital they need to grow and succeed. Provide Mentorship and Support: Small business owners often face unique challenges that can be difficult to navigate. Providing mentorship and support can be incredibly valuable to small business owners, particularly those who are just starting. This support can come in many forms, including networking, coaching, and training.
Advocate for Policies that Support Small Businesses: Governments can also support small businesses by advocating for policies that make it easier for them to succeed. This can include tax incentives, access to capital, and regulatory reform. By creating a favorable environment for small businesses, governments can help to promote economic growth and job creation.
Foster Innovation and Entrepreneurship: Finally, fostering innovation and entrepreneurship is essential to the success of small businesses. Governments and educational institutions can support innovation and entrepreneurship by providing resources and training programs that help entrepreneurs start and grow their businesses. By promoting innovation and entrepreneurship, we can help to create new jobs, products, and services that drive economic growth.

Conclusion
Small businesses are the backbone of the US economy. They play a critical role in job creation, economic growth, and promoting economic resilience. Despite the challenges they face, small businesses continue to innovate and succeed, driving progress and economic development in the United States. As individuals and governments, it's essential to support small businesses by shopping local, investing in small businesses, providing mentorship and support, advocating for policies that support small businesses, and fostering innovation and entrepreneurship. By supporting small businesses, we can help to create a stronger, more vibrant economy that benefits everyone.
Remember: just because your business starts small doesn't mean that you're doomed to a lifetime of smallness. With the right strategies and guidance, healthy small businesses can make the incremental changes necessary to grow into 7 or 8 figure businesses.
Get your game up! And stop playing!

Call now to connect with business.

Let’s make this event a huge success for our veterans. Please follow Warriors Renewal Coalition. A local non-profit with a history.

Meet Chef Erik Pettersen, Executive Chef and owner of Evo Italian. No only will Chef Erik be preparing a signature dish for our Chefs Helping Heroes Fundraiser, has has also invited Warriors Renewal Coalition to host our fundraiser at Evo. We are so excited to be able to share this elegant, intimate atmosphere with all of our guests as we support our combat injured service members and their families.

Evo Italian offers contemporary interpretation of authentic Italian recipes. The draw of family brought fourth generation Italian Chef Erik to south Florida where he opened Evo Italian in 2007. Evo, short for evolution, represents a dream inspired by his Mother Nancy to bring time-honored, old world traditions evolving full circle into fresh new beginnings. Years ago, in the Italian village where his grandparents lived, there were no supermarkets to shop for food, so dinner came fresh from the farm to the table.

We are so thankful for Chef Erik and his outpouring generosity to our mission. Thank you for your continued support of Warriors Renewal Coalition and the combat injured veterans and their families we serve.

To purchase tickets please visit www.WarriorsRenewalCoalition.org/fundraisers

Cyber threats are up, but we're still using our pets' names in our password? One of the main reasons is that we get so tired of changing passwords. Develop a changing formula, or use a password protector. Getting these ideas in place will relieve the aggravation and protect against this increasing risk!

Chubb: People Are Using Multifactor Authentication to Log In...With a Pet Password According to a poll by Chubb of adults in the U.S. and Canada, a little more than half said they use multifactor authentication to log into online

Many of us know people impacted on the west coast of Florida. If you know someone that needs housing, this may be helpful to pass on. If you have a vacation rental or property that you can make available to these hurricane victims, you can list it here.

FloridaHousingSearch.org | Landlord Registration Florida's housing search site. Renters search for free, landlords list rental housing for free.

It's time to start paying attention to this amendment if you own a home or plan on buying a home in sunny Florida. While it encourages actions with tax advantages to those with flood exposure on the coast, the idea is that it will impact everyone's home insurance rates, as there will be fewer damages overall that are paid out. This would, in theory, keep everyone's rates down. Read on...

What you need to know about Amendment 1 There are three proposed amendments to the Florida Constitution that the Florida Legislature voted to place on the ballot this November.

Be on the lookout for possible red flags for insurance fraud. Report any suspicious activity to our Fraud Hotline: (866) 923-2920

Florida insurance companies respond and take care of their customers. YES!!

Building codes implemented and improved for years now since Hurricane Andrew are starting to show remarkable survival in the wake of Hurricane Ian on the west coast. New home construction for buyers and properly mitigating your home are two areas that deserve your consideration.

Florida Building Codes Made a Big Difference for Newer Homes in Ian, Reports Show In the hardest-hit parts of southwest Florida, many newer structures survived remarkably intact in Hurricane Ian's winds, suggesting that updated Florida

No matter how serious our industries can become, you have to always let a little humor in. 🤡

The extent of what has and is happening on the west coast of Florida continues to evolve, and will for quite some time. Lessons will come from it that make us stronger going forward. I've often advised clients over the years to take photos and make an inventory list of their home(s) inventories. I love things improving,m and so when I came across the ability to have an app that actually does all this and more for you, I had to pass it on!
"Dealing with home damage caused by a fire or weather issues is one of the more stressful situations homeowners can deal with. Having a home inventory can help make the process of putting your life back together easier. "
This is just one tool that can be used on both an apple and an android. Do your own homework, read reviews, and then protect your assets!
https://www.homezada.com/?afmc=5s

Digital Home Management - Personal Finance Software App | HomeZada Personal finance software for homeowners to manage their largest financial asset and biggest expense. A consumer fintech, mobile and online software platform that manages your home inventory, home maintenance schedule, home improvements, and home finances. Start today with our free version.

Traveling consumers pay more attention to the idea of "travel insurance" with every horror story they hear. Travel insurance covers financial risks associated with flying, such as flight cancellations, lost luggage, and emergency evacuation. This article explains firsthand the benefits of having this in our world of traveling today.

What travel insurance typically covers and what is excluded from most standard policies Travel insurance typically covers trip cancellation, medical emergencies and evacuation, and lost, damaged, or stolen luggage.

An educated consumer is the best customer. I like that the source for this study is Florida International University. We can all have an impact on reducing insurance premiums.

The big reason Florida insurance companies are failing isn’t just hurricane risk – it’s fraud and lawsuits Shahid S. Hamid, professor of finance at FIU writes about Florida insurance companies in The Conversation.

For all of my luxury realtor friends, this is a very interesting article. Despite the war in Ukraine and increasing interest rates, prime locations and demand for a view remain top "wants" of the luxury home buyer.

Luxury Real Estate Agents are Confident, Optimistic Heading into 2023, According to Global Study by Luxury Portfolio International® /PRNewswire/ -- Research of 200+ member brokers of Luxury Portfolio International® (LPI), the world's leading luxury residential real estate network, is...

https://www.bizjournals.com/orlando/news/2022/10/04/hurricane-ian-flood-home-florida-orlando-insurance.html
I've spent a good portion of my career explaining to clients the importance of flood insurance as part of their "financial planning" despite not being located in an allocated "flood zone." FLORIDA IS A FLOOD ZONE! Hurricane Ian is going to PAINFULLY make this point. You will be hearing more and more about the number of homes that will not have coverage for their devasted and lost homes because it will be a "Flood Claim" The benefits of FEMA after a loss are limited and on a loan basis! Reach out to your agent today and ask to look at both FEMA and private flood programs for a quote.

Hurricane Ian highlights lack of flood insurance for Orlando homes - Orlando Business Journal Many Orlando homeowners lack flood insurance to protect themselves, but real estate and insurance professionals expect that outlook to change after Hurricane Ian. Here's more.

: Catastrophe Response Centers (CRC) open tomorrow in and at the Florida Department of Financial Services Insurance Village in .

Can't come to us? Report your claim 24/7 online via myPolicy www.citizensfla.com/mypolicy or call us at 866.411.2742.

Florida Peninsula Insurance is ready! Call or go online to report your claim. https://www.floridapeninsula.com/

There are many things to remember in the event of an emergency, be sure to save these numbers in a safe and dry place. You never know when you will need them.

https://weather.com/storms/hurricane/news/2022-09-28-hurricane-ian-forecast-landfall-florida-damaging-winds-storm-surge

Hurricane Ian Lashing Southwest Florida With Catastrophic Surge, Winds, Flooding | The Weather Channel The very latest forecast information and current status of Hurricane Ian is here. - Articles from The Weather Channel | weather.com

In my opinion this is an excellent explanation as to why we are in the insurance crisis for personal insurance that we are. It's not all about our home construction.

Century Risk Advisors: Douglas Sawyer
I N S I G H T S

The Growing State of Citizens

The number of Citizens Property Insurance Corporation policies are increasing at an alarming rate.

As of July 2022, Citizen’s policy count stood at 937,835, which is double that of 2020. At the current growth rate of 6,000+ policies a week, Citizens will have well over a million by year-end. What was intended to be an insurer of “last resort” will become, if not already, the go-to provider of homeowners insurance in Florida. This exponential growth is a stark indicator of significant problems in the State’s insurance market.

Causes

Although Florida hasn’t been struck by any major storms the last few years, it doesn’t mean the state has been immune to catastrophic losses suffered across the country, such as the wildfires in California, snowstorms in Texas, and tornadoes in the Midwest. These events affect premium levels for everyone. Those events add-on to Florida’s already high-risk profile by being a peninsula surrounded by water on 3 sides. Hurricanes, water intrusion, mold, sink holes and the recent tragic collapse of a condominium on the shoreline do result in large insurance claims. Accordingly, insurance carriers have a monumental task of covering the risks posed by our State at premiums that a consumer can afford. While perhaps well intended, legislators, regulators, and our residents have made that task even more difficult.

Historically, our legislators and regulators have strived to keep a ceiling on premiums, which disincentivizes carriers from writing more business in Florida. Some contend that it has even caused some carriers to put themselves in financial jeopardy. A 2010 study by Florida State University revealed that efforts by regulators to keep State insurance rates artificially low has resulted in undercapitalized companies. This has placed the State’s insurance market in “great peril.”

So, while carriers have long contended with Florida’s push back on higher premiums, over the last several years, consumer-leaning legislation has resulted in an extraordinary number of claims and litigation. While not going into detail, key pieces of legislation that allegedly pose undue risk to carriers: the requirement to provide full roof replacement if there is damage to 25% of the roof; the ability for attorneys have their fees paid for by the carrier if a claim is ultimately paid; and a “multiplier” of attorney fees on property claims.

The well-intended legislation created the unintended consequence of incenting roofing contractors to aggressively seek out business and for attorneys to take on litigation. While contractors, attorneys, and consumer advocates passionately argue their efforts are in good faith, there is no argument that Florida has become ground zero for the bulk of the country’s insurance litigation. According to the Insurance Information Institute, Florida may only represent 9% of all insurance claims in the country, but it accounts for 79% of the homeowners’ insurance lawsuits filed. The report went on to warn that Florida’s current homeowners’ market is on the verge of failure due to fraudulent roof repair schemes and excessive litigation. The report called it a “man-made catastrophe.”

The cost of the litigation is great.

A May 2022 seminar by law firm Greenberg Traurig revealed that insurance litigation expenses for carriers between 2013 to 2020 totaled $15Billion. Citizens has not been able to avoid these costs. In a December 2021 Claims Committee Meeting, the Board authorized $50Million for legal representation. In a July 2022 Board meeting, an additional $50Million is being requested. Of note, a Daily Business Review article states that in the first four months of 2022, Citizens was served with 3,881 lawsuits, an average of over 900 a month, with 75% of those lawsuits coming from the Miami-Dade, Broward, and Palm Beach counties.

Special Legislative Session

A special session of the Florida Legislature was called in May of this year, resulting in the passage of new insurance laws aimed at reducing roofing claims and curbing excessive litigation. Though a positive step, many contend that it could take years for homeowners to experience any benefits. A June 30, 2022 Vero News article points out that the legislation is effective on the date of passage, May 26, 2022. Any “breach” of policy on the part of an insurance company prior to that date is likely to be decided under old law. Per the article, many more lawsuits can be brought stating that the “breach” occurred prior to May 26, 2022. Complicating matters is that Florida law affords plaintiffs in property insurance matters a five-year statute of limitations, meaning that cases filed today could be attempting to remedy a breach that occurred five years ago.

Industry Impact

The insurance industry claims the impact of excessive fraud, litigation, and inadequate premium levels is causing carriers to go out of business and/or reduce its exposure to the Florida market. Recent events lend some credence to this argument. To date, ten property and casualty companies are in liquidation, four of which are in bankruptcy. It appears that the remaining carriers are tightening their underwriting criteria and increasing premiums, in some cases as high as 30-50%.

Rate Relief Via Rate Hike

While less carriers writing business in Florida certainly results in more policies for Citizens, the most significant factor that drives growth is its lower premiums. Florida law caps how much Citizens can increase premiums, which is 11% and 12% for 2022 and 2023 respectively. Despite legislative caps, Citizens still needs approval of the Florida Office of Insurance Office (OIR) for premium increases. For 2022, Citizens was approved for only a 6.4% increase for HO-3 policies which was below its request of 10.7% In a rate filing memo Citizens stated that if no cap was in place, it would need an average increase of 30% for HO-3 policies. Having historically requested increases below the cap, the company explained that its position reversal was to “prioritize Citizens’ financial soundness, which is rapidly deteriorating due to Citizens’ precipitous growth.”

The primary way homeowners can qualify for a Citizens policy is to show that premiums from a Florida authorized carrier are more than 20% higher than premiums for similar coverage at Citizens. With carriers continuously increasing their premiums at rates higher than the legislative caps imposed on Citizens, that hurdle is becoming much easier to overcome. Also of note is that Citizens will not cover homes with replacement values greater than $700,000. Because of higher costs in Miami-Dade and Monroe counties, Citizens allows for a $1,000,000 replacement cost in those counties. Take note, the amount is based on replacement cost, not market value, which we know has significantly increased over the last one to two years.

What happens if Citizens has a deficit?

With the ever-growing exposure at Citizens, it’s important to know that should the insurer not have the funds to sufficiently cover the claims resulting from a catastrophic event, the State has three mechanisms it can implement to recover a capital deficiency. The first tier are the existing Citizens’ policy holders, who can be assessed a one-time charge of up to 45% of their premium. If the assessment of Tier One is insufficient, the State can then assess a one-time charge to all private market policyholders, including, but not limited to, homeowners, auto, and specialty and surplus lines up to 2% of the premium. Should those prove to be inadequate, the State may assess Citizens and all private-market policy holders up to 30% of the premium per year until the deficit is eliminated.

The administrative and logistical challenge to collect on these assessments would be enormous and how it would impact the timing to pay out claims on such a catastrophic event is difficult to project.

Of course, another elephant in the room issue with this process is how many policyholders can not afford to pay the assessments.

Solution

It is hoped over time that costs and premiums come to a point which attract more carriers to our market. Greater private market competition should result in better coverage at lower rates which in turn reverses the growth in Citizens’ policies. To get there, the challenges posed in the Florida property insurance arena need to be understood and addressed in a manner that allows for the market to operate effectively and efficiently.

Florida’s elected officials, regulators, and residents should make it a priority to make this happen as soon as possible.

It won’t be easy.



Century Risk Advisors is an independent insurance and risk management firm providing personal, commercial, and employee benefit services. For more information email [email protected] or visit centuryra.com.




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Florida’s Chaotic Insurance Market Braces for Hurricane Ian Bloomberg The Open Jonathan Ferro drives you through the market moving events from around the world on Bloomberg's The Open. 60 minutes featuring the brightest minds on Wall Street, taking you through the most important hour of the trading day.