Worst. Idea. Ever.

[Policy Monkey]

Florida Bill Would Require Option of Policies That Cover Only Unpaid Mortgage Amount

Ahead of Florida's 2024 legislative session that begins Jan. 9, at least a dozen bills have been filed that could have an impact on the state's insureds

www.insurancejournal.com

I ran across this article and was dumbfounded. This proposal is absurd, even for Florida. I just hope someone in our state capital wakes up and squashes this.

 

[Allen Trent]

Florida Bill Would Require Option of Policies That Cover Only Unpaid Mortgage Amount

Ahead of Florida's 2024 legislative session that begins Jan. 9, at least a dozen bills have been filed that could have an impact on the state's insureds

www.insurancejournal.com

I ran across this article and was dumbfounded. This proposal is absurd, even for Florida. I just hope someone in our state capital wakes up and squashes this.

its fine, its fine. I am sure no agents would ever just insure a $600k house for $50k because the mortgage is almost paid off

would be interesting to see how they would pay a partial loss claim of $30k on someone insuring the house for 10% of the cost to rebuild

 

[whatyouwantfinally]

"You're lucky we called, it looks like someone sold you more coverage than you need and we can save you a bunch of $..."

 

[Policy Monkey]

its fine, its fine. I am sure no agents would ever just insure a $600k house for $50k because the mortgage is almost paid off

would be interesting to see how they would pay a partial loss claim of $30k on someone insuring the house for 10% of the cost to rebuild

I hadn't thought of that. How would the 80/20 coinsurance clause apply if the option to underinsure was mandated by law?
I was more focused on the inevitable carrier and agent E&O lawsuits.

 

[Allen Trent]

I hadn't thought of that. How would the 80/20 coinsurance clause apply if the option to underinsure was mandated by law?
I was more focused on the inevitable carrier and agent E&O lawsuits.

I am sure the proposed idea is to remove the insurance to value or coinsurance stipulations in the Policy language requirements. Considering most claims are not complete losses or even all extra large losses, doubt carriers are going to want to cover all partial claims at 100% if consumer is only paying premiums to insure a fraction of their house. How about debris removal coverage, loss of use & contents that are all linked in many cases to Cov A

 

[Policy Monkey]

I am sure the proposed idea is to remove the insurance to value or coinsurance stipulations in the Policy language requirements. Considering most claims are not complete losses or even all extra large losses, doubt carriers are going to want to cover all partial claims at 100% if consumer is only paying premiums to insure a fraction of their house. How about debris removal coverage, loss of use & contents that are all linked in many cases to Cov A

All valid points. This is what happens when we elect clueless people. I'm guessing the lady who proposed it has a small mortgage and is mad that she has to insure to RC.
I just hope someone in Tallahassee laughs this off of the house floor. But then again this is Florida, so I'm not holding my breath.

 

[adjusterjack]

She's blond and in the real estate business.

That explains everything.

 

[InsuranceJerk]

its fine, its fine. I am sure no agents would ever just insure a $600k house for $50k because the mortgage is almost paid off

would be interesting to see how they would pay a partial loss claim of $30k on someone insuring the house for 10% of the cost

Florida Bill Would Require Option of Policies That Cover Only Unpaid Mortgage Amount

Ahead of Florida's 2024 legislative session that begins Jan. 9, at least a dozen bills have been filed that could have an impact on the state's insureds

www.insurancejournal.com

I ran across this article and was dumbfounded. This proposal is absurd, even for Florida. I just hope someone in our state capital wakes up and squashes this.

Straight to E&O.

 

[marindependent]

doubt carriers are going to want to cover all partial claims at 100% if consumer is only paying premiums to insure a fraction of their house.

Totally Agree - Hence I question how much "real" savings many insureds will see. My guess is that the silly bureacrats and consumers simply believe that $100K of CoverageA is just a fifth of the premium of a $500K CoverageA.

 

[Allen Trent]

Totally Agree - Hence I question how much "real" savings many insureds will see. My guess is that the silly bureacrats and consumers simply believe that $100K of CoverageA is just a fifth of the premium of a $500K CoverageA.

Then will sue when contents, loss of use, other structures, etc default coverage not enough either.

Any such plan would need an automatic deductible as a % of partial claim & not just 1-2%, but as much as 30, 40 or 70% in line with the choice to grossly underinsure