Why? Because they can!

7 years without storms but Florida rates keep rising !

I just read the following article and it reminded me that I have been about to write something on the ruthless way that insurance rates are being pushed up with no valid reason; and why Citizens, the insurance company of last resource, sponsored by the State of Florida is under constant pressure from legislators and lobbyists to relentlessly hike its rates and limit the quantity of policies it writes, so that they can be taken over by ...guess who?

Notwithstanding the good work at keeping rates at bay during many years, it looks like Citizens is a thorn in the insurance companies' flesh. Years ago they claimed that Florida was too risky to cover. We decided to live without them and assume the coverage by ourselves with Citizens, which happens to be a pretty good idea. 

But apparently these same insurance behemoths had second thoughts or they just decided that at very high premiums, we were definitely worth the risk. I suspect that the undermining of Citizens, the constant criticizing of its management, the angst about its possible insufficient reserves, are part of a larger plan to come back at their own (very expensive) terms.

We, real estate people, who worry about affordability, are alarmed by the recent premium increases. These have added to bank's unusually strict demands and delays in granting mortgage loans, that have hampered many purchases of middle class buyers. 

I have not sold a single property to a local buyer in the last 5 years. I have not sold anything that wasn't hard cash. And the new insurance rates are becoming an additional hurdle.

Read on: 

It's been nearly eight years since Hurricane Wilma raked the southern end of Florida and caused billions in damages, the last of eight hurricanes to hit the state in 2004 and 2005.

Yet even as the state has been spared from additional hurricanes since that time Florida's fragile property insurance market has resulted in nearly year after year of steadily rising insurance rates for homeowners."We have no choice to continue to pay it," said Henry Kempf, a customer with state-created Citizens Property Insurance Corp. who owns a home in New Port Richey.  "We will have to afford it in order to have the peace of mind. "

Annual reports prepared by Florida's Office of Insurance Regulation show that the department has been approving more than 100 rate hike requests a year since 2009 - including requests to hike rates by double-digits.

That includes increases for Citizens, the state's largest residential property insurer with nearly 1.3 million policyholders. A report released in January by Florida State University concluded that homeowners in the state paid nearly $8 billion in premiums in 2011. And sometimes the financial impact doesn't just come from rate increases. The state-created Citizens, for example, has tightened its policies to cut down on discounts it offers or raised deductibles connected to sinkhole coverage. Citizens is supposed to be for property owners who can't get private policies.

For Kempf the whole situation is frustrating: "No one is watching out for the people of Florida. Everyone has their own agenda."

Hurricane storm season officially starts Saturday and federal forecasters predict it will likely be more active than an average hurricane season. The prediction issued last week calls for 13 to 20 named Atlantic storms, seven to 11 that strengthen into hurricanes and three to six that become major hurricanes.  This storm season, however, may prove even more crucial than ever for homeowners in the Sunshine State. That's because some are predicting Florida may be finally reaching the end of a volatile period for insurance rates - if the state can avoid disaster this year.

"There are some early signs we have reached price equilibrium," Florida Insurance Commissioner Kevin McCarty said last week. Locke Burt, chairman and president of Security First Insurance, the state's fourth-largest residential insurer, predicted his company will likely not ask for a rate hike in the coming year.  The reasons for Florida's steadily-increasing rates are varied and have triggered endless argument especially among state lawmakers and others in the last two decades.  The biggest expense remains the cost of "reinsurance" - which is the money an insurer spends with an out-of-state or foreign company to provide the company financial backing in case of major claims. 

Other causes that have been cited include millions in other types of losses such as sinkholes. A Pulitizer Prize-winning series in 2010 by the Sarasota Herald-Tribune pointed out how insurers paid out millions in bonuses to company executives or had large overhead costs compared to the rest of the nation.

Plus, McCarty conceded all rate filings are allowed to include some percentage of profit for private insurers.  Sean Shaw, the former insurance consumer advocate for the state, put the blame on the Florida Legislature for siding too often with the insurance industry. 

"The senior citizen living on a fixed income simply can't keep paying increase and increase with no real explanation," said Shaw, who is now an attorney with a Tampa firm that represents policyholders. "When will the consumer stop taking it on the chin and when will the Legislature say enough is enough?"

Insurance industry officials argue insurers in the past did not charge adequate rates to deal with the real risk of covering homes in hurricane-prone Florida. The fragile nature of the market has been exposed by storms such as Hurricane Andrew in 1992, a Category 5 storm that destroyed much of the South Florida city of Homestead, and the series of storms that battered the state in 2004 and 2005. 

Burt, using data collected by McCarty's office, contends that while the average premium has gone up since 2007 that the actual coverage provided to homeowners has also gone up. Burt said that means the average premium per $1,000 in property value has actually gone down during that time period.  Insurance companies, by law, cannot raise rates in order to recover money paid out during a storm.  But practically speaking, a large hurricane can still trigger rate hikes. Large storms and huge damages can prompt reinsurers based outside the state to raise their rates, which translates into higher costs for the insurers covering homeowners.  "If there are no hurricanes, those guys are happy, happy, happy,"" said Burt, whose Ormond Beach-based company has about 180,000 policyholders. 

Burt added that insurers need to purchase adequate reinsurance each year to make sure they have the resources in a case a big storm strikes the state. "We don't want to be a thinly capitalized Florida company that is going to blow away when the wind blows,"" he said. 

The reason Burt and McCarty predict rates may stabilize is that reinsurance costs declined this year.  But that may not be enough for the roughly 1 in 5 residential policyholders who belong to Citizens. 

Citizens insures older homes as well as homes in hurricane risky coastal areas. Citizens has also pretty much become the only insurer available in sinkhole prone areas such as Hernando and Pasco counties said John Reddin, who runs an insurance agency in Spring Hill.  A big debate this past legislative session centered on whether Citizens is charging enough to cover its risk. 

Citizens' rates - for most types of coverage but not all - cannot go up more than 10 percent a year. Some legislators such as Sen. David Simmons argued that Citizens rates are distorted and that the law needed to be changed to allow rates to go up higher for some customers. 

In the end, the sweeping legislation pushed by Simmons was not adopted. But Citizens will likely file for another series of rate hikes later this summer that will take effect in 2014.

From Bradenton Herald – May 27, 2013

Henry B. Nathan is a Real Estate Professional. 

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The Real, Deep Cause of the Recession.

You can understand most of our problems if you focus on the most important...

More than in any other branch of the country's economy, real estate crisis might be the thermometer US middle class' distress and the looming destruction of the American dream of home-ownership.

Mortgage abuses and frauds, banks games of hedges, CDO's and Credit Swaps, uncontrolled financial schemes are of course signs of the bad course we're on. However, they are not the whole story.
They are in fact relatively correctable issues that can be addressed with regulations and government controls.

What hasn't been addressed and will not be any time soon is the continuous deterioration of employment and salaries.

We hear our legislators and our president planning on the creation of new jobs and new opportunities. This sounds so ridiculous when we read every other day about thousands of American jobs lost, small businesses closing doors, corporation shipping away their research and development departments, their calls centers, their accounting and their software engineering to India or China.

Who are we going to sell these condos and these homes to? Or are we going to end up as humorously said by somebody "selling insurance policies to each other" ?

A substantial part of realtors' activity has been switched to selling a large part of whatever is being sold now, to foreigners, Canadians, French, Japanese, you name it. Because these people are gradually becoming the only ones who can afford buying a home in America. And I am not being xenophobic, just observing facts.

Read for example the following article from the St. Petersburg Times in Tampa. It's the symbol of our times.
Observe that we are not losing blue collar jobs. They have been gone long time ago. It's not about U.S. Steel, or G.M. assembly workers.
What we see now are the very same high-tech class of workers that we are supposed to become, by going back to school to retool our knowledge, learn, and prepare for the new times and the new careers. These jobs, businesses, technologies, that were supposed to keep our country in its traditional position of economic dominance, and sustain the prosperity and livelihood of our middle class.

Read on:


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PricewaterhouseCoopers to lay off 500 workers, mostly in Tampa

PricewaterhouseCoopers will lay off about 500 information technology workers, most of them in Tampa, as part of a broader push to outsource to cheaper labor.

The news is an untimely blow to Tampa Bay's economy, which is already battling a 12 percent unemployment rate, the fifth-highest among the country's largest metro areas. It also comes amid a recent resurgence in mass layoffs and growing concern nationally that the economy might slip into a double-dip recession.

"It's just terrible news," Tampa Mayor Pam Iorio said Friday. "It's a terrible job market for those people to find other jobs and I'm very sorry to see it happen. … They're moving jobs away from this community and that's a negative. And it's a negative to our national economy when jobs are moved overseas."

PWC spokesman Jonathan Stoner said the consulting powerhouse employs 1,100 in its information technology group nationwide. Of the 600 remaining employees, most will stay in its Tampa hub, he said. With four locations and 1,850 employees in the Tampa Bay area as of early this year, PWC has been one of the region's top employers. In March, it ranked No. 3 among large bay area companies in the Times' Top Places to Work survey.

Iorio said PWC did not approach the city asking for incentives to keep workers here. "If they're making a fundamental decision to move jobs overseas to reduce labor costs, that's a business decision," she said, "and I don't think there's anything any American city can do to compensate for that."

Stoner said the decision stems from a combination of PWC's information technology groups in the United States and United Kingdom.

"The U.S. and UK firms are combining governance, organizational structure and business processes and a single, Indian-based vendor will provide service to both member firms," he said.

Other reports identified Tata Consultancy Services of Mumbai, India, as the vendor, but Stoner said the company does not comment on clients or third-party contracts.

He also disputed one report that employees were told they would have to reapply for positions at Tata. "What we have told our employees is that they are all to be encouraged to apply for other positions at the firm, at PWC."

Throughout the recession, corporations have continued to outsource jobs to Indian vendors to save money, with Tata often reaping the rewards.

Idearc Media, which publishes the Verizon Yellow Pages, laid off 150 employees in St. Petersburg in December as it transferred much of its publishing business to Tata. Ratings agency Nielsen Media Research also turned to Tata for cheaper labor in laying off 170 information technology employees at its Oldsmar complex in 2008 and 57 in November.

Workers found out about the Pricewaterhouse layoffs on Thursday, coming in the wake of PWC cuts elsewhere statewide, including the shutdown of its tax practice office in Orlando.

A half-dozen workers exiting PWC's Lakepointe office complex on Dr. Martin Luther King Jr. Boulevard on Friday said they were in shock, but were warned by managers not to speak publicly. Workers said the company had not given details on severance packages nor a specific time line, except to indicate cuts would likely be completed by the end of the year.

One worker, an Indian contractor for PWC, said the project he's working on will likely be shut down, leaving him with bittersweet emotions: He's sad for his colleagues here and happy for people in India.

As recently as a month ago, Florida economists were pointing to a slowdown in mass layoffs as a sign that the economy was starting to recover.

But July has been a particularly brutal month based on recent mass layoff notices filed with the state. Among them: 892 workers affiliated with the Kennedy Space Center; 320 with the GEO Group in Graceville; 81 at LifeLink HealthCare Institute in Tampa; 245 at Lockheed Martin Corp.; 344 at Kehe Distributors; 221 at Mosaic Fertilizer in Fort Meade; 100 at Bank of America's Idlewood Avenue location in Tampa; and 67 at Enterprise Leasing in Tampa.

All told, 16 layoff notices have been filed in July affecting 2,864 workers statewide. That doesn't include this week's cuts by Pricewaterhouse.

And, as a Spanish poet said: The Rest is Silence

Henry B. Nathan is a Real Estate Professional. Please visit our website and learn about:

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Hallandale Traffic Cameras - I call it our New Tax

Is Hallandale Beach city the "City of Choice" ?
Not anymore for some drivers who, as we can read below, will try to avoid Hallandale's cameras trap.

One Million Dollars in six months! This is the take of the city and they have recently increased the fine from $125 to $158, so that they can share part of this revenue with the State of Florida.
And that's just the beginning.


$158 for not slowing down enough at a red light right turn, seems so excessive and such an hypocritical money grab!

Read on:

The Sun Sentinel - July 10, 2010 – By Michael Mayo.

Red-light cameras are helping Hallandale Beach raise $1 million

In theory, red-light cameras are supposed to be about safety, curbing reckless drivers from blowing through intersections at high speeds.

But the reality at one South Florida intersection seems more like a game of "Gotcha," with an astounding 93 percent of violations going to unwitting drivers making rolling right turns on red. "This feels like a money grab," said Phil Kodroff, one of almost 11,000 drivers to get snagged by Hallandale Beach's red-light camera since it started snapping away in January.

The city's take by mid-June: almost $1 million.

"Let's be honest about it, we're here to gouge you," said Hallandale Beach Commissioner Keith London, an opponent of red-light cameras. "To say it's about public safety is pretty disingenuous. It's all about the revenue." Love them or hate them, the cameras soon will become fixtures of South Florida life. Now that the devices have gotten the green light from the Legislature and Gov. Charlie Crist, more cash-strapped cities will be turning to them for easy money. In the past week, Fort Lauderdale, Hollywood and Boynton Beach have moved forward with plans to install cameras. They will join Hallandale Beach, Pembroke Pines and West Palm Beach, which already have cameras running. Royal Palm Beach installed cameras in November but has been issuing only warnings; fines likely will start by September. Under the law that took effect July 1, fines for the first offense increased to $158 from $125, with the money now divided between the state and cities.

"The mentality of the South Florida driver is going to have to change," said Mark Antonio, interim city manager of Hallandale Beach. Said Hallandale Beach Police Maj. Dwayne Flournoy: "It's the 'Halo effect.' If you get compliant at one intersection, your behavior will change at all the others."

Kodroff, of Hollywood, said his behavior has changed: He is avoiding Hallandale Beach's camera intersection at Federal Highway and Hallandale Beach Boulevard, along with the businesses on that corridor. After a steak dinner at the Gulfstream Park casino complex May 22, Kodroff thought he had an uneventful drive home to his beachfront condo. A month later, he opened his mail to find a $125 ticket. His speed when he made the right on red onto Hallandale Beach Boulevard, according to the violation notice: "0." "It's not sensible," Kodroff said. "I hit my brakes, I thought I came to a full stop." A Miami-Dade judge put the brakes on the cameras in February, when he ruled that Aventura's program was improper. But legislators rewrote state law to allow them. Fines are sent to the registered owners of vehicles. The owners can appeal or get the fine transferred if they weren't driving. Under the new law, the vendor no longer gets a percentage of revenue, but a fixed monthly rate. American Traffic Solutions of Scottsdale, Ariz., dominates the market, managing the programs for all the South Florida cities.

Camera advocates say they make red-light runners think twice before blowing through intersections, reducing devastating T-bone crashes. But critics say the cameras could spur an increase in rear-end collisions, as people slam on their brakes at the last second. "If it's used in the right context, catching people who blow through a light, I don't have a problem with it," said Kodroff, who paid his fine without disputing it. "But getting people making a right on red, if they stop after the crosswalk or are going two miles per hour, seems a little shady."

Hallandale Beach is alone in enforcing right-turn violations. Pembroke Pines and West Palm Beach issue fines only for straight or left-turn violations. West Palm Beach changed course on right-turn enforcement six weeks after its program began in February. About 65 percent of violations were for rolling rights on reds in the first month, according to city spokesman Peter Robbins. Among those cited: West Palm Beach Mayor Lois Frankel.

After scores of complaints, the city stopped issuing violations for right turns at three camera intersections. "We're not trying to play 'Gotcha' with the public, we're just trying to increase safety," said West Palm Beach police spokesman Chase Scott.

But in Hallandale Beach, which has two casinos that draw thousands of monthly visitors, the right-turn trap continues. The highest-profile offender: former NFL player Warren Sapp. In May, when Kodroff was cited, an astounding 1,563 of 1,597 violations were for right turns. That's 98 percent. "Are you saying that an improper right on red is any less of a violation?" Flournoy said. "That doesn't seem fair." Hallandale Beach's camera has been averaging 66.5 daily offenses, many more than in the other local cities. Pembroke Pines' lone camera has averaged 9.6 offenses per day, generating $418,536 in fines and 4,568 violation notices since March 2009.

West Palm Beach's three cameras have generated roughly $682,000 since February, with 5,456 offenses, an average of 13.5 daily per camera. In Hallandale Beach, police officers review video of each offense before sending tickets. In Kodroff's case, the video shows he hit his brakes but didn't come to a complete stop before turning. So why did his violation notice show his speed at zero? "Zero doesn't mean zero," said Flournoy. He said violation notices soon would be changed to be more accurate. Under the new state law, drivers making a right cannot be cited if they turn "in a careful and prudent manner." Kodroff said his turn fell into that category, because there was no approaching traffic and nobody in the crosswalks. Flournoy said the new language will give officers "more discretion" in cutting down violations. Under the city's previous ordinance, any car that didn't come to a full stop before the crosswalk was cited.

Expect more lawsuits and more confusion.

"Soon there'll be more case law, and we'll govern ourselves accordingly," said interim city manager Antonio.

It's hard enough for some to stomach the Big Brother aspect of the red-light cameras. But if cash-starved cities are going to be so piddling when it comes to enforcement, we should all be afraid.

Henry B. Nathan is a Real Estate Professional. Please visit our website and learn about:

Sunny Isles Beach Condos

Sunny Isles Real Estate

Aventura Real Estate

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