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Florida veterans hit with massive property insurance rate increase on Veterans Day

Many of Florida’s 1.6 million veterans have their property insurance with United Services Automobile Association (USAA). USAA’s membership base is primarily active duty military, military retirees, veterans and their families. Over the Veterans Day weekend policyholders received their new USAA policies. Florida’s veterans were shocked that, for a second year in a row, they are being hit with a massive increase in property insurance rates. Most of Florida’s veterans are on a fixed income.

Senior Chief Geoff Ross USN (Ret.) from Navarre, Florida in an email to WDW – FL writes, “Today your friendly Senior Chief got into a pissing contest with his homeowners insurance company USAA. They just can’t stop jacking up my rates this time almost doubling my policy. So in my polite and cordial tone I called them up and politely told them where to shove their new rate. The lady actually was very nice and tried very hard not to lose me as a customer after 14 years with this company.”

A Sarasota County veteran who has been a member of USAA for thirty-nine years, saw the property insurance on his modest home go up $741.95. According to his USAA policy, “Of this amount, $693.26 is due to a rate increase, and $48.69 is due to other changes initiated by you or us.” Nothing changed on his home in 2013, which was built in 1990, and he changed nothing on his policy other than increase his deductibles in 2012 to reduce his premium. He raised his risk to keep his costs down, as he is on a fixed income.

WDW – FL contributor Ruth Roman wrote, “Flood insurance premiums for Floridians are expected to rise sharply as the result of new rate hikes which have gone into effect October 1, 2013.  ’They are not aware of what is about to hit them,’ said Pattit Latshaw of St. Petersburg-based Wright National Flood Insurance Co., the largest underwriter of federal flood insurance in the U.S. The repercussions of these hikes will be devastating for homeowners and small businesses alike.”

When the Sarasota veteran contacted USAA about why the dramatic and costly increase he was referred to paragraph 6 of his policy which states in bold letters, “IN RESPONSE TO FLORIDA LEGISLATION SB1486, LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE THAT YOU MAY WISH TO PURCHASE. YOU MAY ALSO NEED TO CONSIDER THE PURCHASE OF FLOOD INSURANCE FROM THE NATIONAL FLOOD INSURANCE PROGRAM. WITHOUT THIS COVERAGE, YOU MAY HAVE UNCOVERED LOSSES. PLEASE DISCUSS THESE COVERAGES WITH YOUR INSURANCE AGENT.”

The Sarasota veteran’s USAA policy also states in paragraph 9, “Your policy does NOT cover loss due to flood from any source. For information about obtaining flood coverage from the National Flood Insurance Program (NFIP), call USAA at (800) 531-8722, or contact the NFIP directly.”

The NFIP website states, “In 2012, the U.S. Congress passed the Flood Insurance Reform Act of 2012 which calls on the Federal Emergency Management Agency (FEMA), and other agencies, to make a number of changes to the way the NFIP is run. As the law is implemented, some of these changes have already occurred, and others will be implemented in the coming months. Key provisions of the legislation will require the NFIP to raise rates to reflect true flood risk, make the program more financially stable, and change how Flood Insurance Rate Map (FIRM) updates impact policyholders. The changes will mean premium rate increases for some – but not all — policyholders over time.”

Florida is hardest hit as it is both flood and hurricane prone. The Sarasota veterans home is not in, but is near, a floodplain. The Sarasota, Florida veteran also noted that his property insurance policy includes coverage for: Volcanic Eruption; Weight of Ice, Snow or Sleet; Explosion; Riot or Civil Commotion; and Aircraft.

If the Sarasota veteran’s home is not in a flood plain then what caused such a dramatic increase in his annual property insurance premium? Answer: Surcharges.

His USAA policy statement under “surcharges” lists the following:

EMERGENCY MANAGEMENT FUND $2.00
FL HURRICANE CATASTROPHE FUND (FHCF) PREMIUM RECOUPMENT $276.45
FL HURRICANE CATASTROPHE EMERGENCY ASSESSMENT $48.51
CITIZENS EMERGENCY ASSESSMENT $37.32
FL INSURANCE GUARANTY ASSOCIATION RECOUPMENT $22.12

Total – $386.40

Chief Ross noted something else strange when talking with his USAA insurance agent.

ross fish pond

Chief Ross’ Koi fish pond. For a larger view click on the image.

“Well what was interesting was this fact. I put in a Koi fish pond a few years ago in my backyard. Its pretty cool and it has fed many Blue Herons in the past that swoop in and steal my aquatic buddies. But check this out. The lady on the phone said I have a beautiful house and my back yard is lovely with a lovely pond. Let me tell you boys and girls I did not tell my insurance company I put in a Koi pond. There is only one way you can see this feature due to my location and that is from the air,” notes Ross.

Ross concludes, “Using my superior skills of decisive intellect and previous life hanging out with CIA operators I conclude these people took aerial pictures of my house to see if I am adding improvements, pool, etc.I am so isolated out here surrounded by trees etc. the only way to see in my back is from above. I asked the lady how did she know I have a fish pond in my backyard and she did not reply. I could here her shuffling the pictures of my home around in her hand. Boys and girls if you have homeowners insurance with USAA and you put in a swimming pool or add on a new room they will know about it…… look above you for the satellite taking pictures. Skinny dippers beware.”

So veterans across Florida are faced with either paying the higher premiums, taking on more risk to reduce their property insurance rate or cancelling their USAA policy. Happy Veterans Day 2013!

Dr. Richard Swier

Dr. Rich Swier is Publisher of www.DrRichSwier e-Magazine. He holds a Doctorate of Education from the University of Southern California in Los Angeles, CA, a Master's Degree in Management Information Systems from the George Washington University, Washington, D.C., and a Bachelor's Degree in Fine Arts from Washington University, St. Louis, MO. Richard is a 23-year Army veteran who retired as a Lieutenant Colonel in 1990. He was awarded the Legion of Merit for his years of service.

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