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JIM SMITH TALK SHOW HOST
STAND F.I.R.M.
Florida Keys Day
n A N I N T E R V I E W W I T H Annalise Mannix
Jim Smith | JS Anyone who has been in the Keys for any length of time has probably heard of F.I.R.M. — Fair Insurance Rates Monroe County. Tere’s actually a connection between F.I.R.M. and real estate, and that’s one word — expense. I personally can’t believe how much I’m paying for wind insurance, but it’s all part of being a homeowner in the Keys, isn’t it?
Annalise Mannix | AM Most of us pay at least $500 a month insurance for a house, $3,000-5,000 for windstorm, and flood insurance is going up every year for the next 10 years. Home- owner’s insurance even went up for some odd reason.
JS People have different philoso- phies, but mine is any insurance is a bad idea, so unless you have to have it, don’t get the insurance. Even if playing poker, and the dealer asks “you want insurance on this?” Te answer is “No!” When I’m dealing with real estate customers, if they’re paying cash for the property I tell them not to get windstorm insur- ance because I feel anyone who had a choice would not get it. Do you agree? AMFlood is our largest concern. When we have a large storm, flood is going to be the biggest issue of concern, not windstorm. When you have a Category 5 storm, wind will become an issue, but if you’re in the flood plain your house is going to be flooded and not destroyed by the windstorm. Flood insurance is a lit- tle bit more important in the Keys then wind insurance, and our
buildings are built so much stronger than other counties that we have significantly less damage. A recent poll showed that we had stronger winds yet had significantly fewer claims paid because we have always built our buildings stronger than most other counties in the state.
JS I’ve owned a home here since 1999. I’ve paid 12 years worth of premiums but never had a claim, never gotten a penny back from windstorm. Tat’s probably $90,000 in 12 years I’ve paid out with a $20,000 deductible, so you’d almost have to blow my house down before it made any sense to have windstorm insurance. Tis is just a big bad expense, isn’t it? AMWe believe it is more expensive than it should be because you create models to determine what your rate
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is and the model is supposed to take into account all sorts of things such as the strength of the home, the number of events and claims, cost of reinsurance,cost of business op- erations, etc. Te state approves the models used by all insurance com- panies, and all just doubled our rates around 2005-2006. After that we started looking at the models and asked what went into them and found a lot goes in but they don’t quite take out the things you should be getting credit for. We pay very high administrative expenses compared to other companies. Private companies have much lower administrative expenses than Citizen’s. Tey don’t deduct the flood risk. If we have a Category 3, 4, or 5 storm, which is kind of when Citizen’s kicks in, you are going to have a storm surge that
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