The Legislature's Special Session dealing solely with the Insurance Crisis just wrapped up and below is a summary of the the results:

1. Heighten standards for Florida-only subsidiaries (Pup Companies)
• Require all Florida-only subsidiaries to have a surplus of at least $50 million in liquid assets to help ensure that policyholders can receive payment when they need it.

2. Greater Accountability in Rate Filing
• Prohibit excess profits by property insurers and require return of excess profits to policyholders. An insurance company earns an excess profit when its surplus (cash on hand) exceeds its PML (total projected loss) for a 250-year return period and it has earned a net underwriting gain (actual premiums – losses + expenses) in Florida in excess of 10% above its anticipated underwriting profit over the most recent 10-year period.
• Suspend until December 31, 2008 the "use and file" procedure for rate increases. Insurance companies will have to seek and obtain OIR approval before implementing a rate increase during this two year period.
• Suspend until December 31, 2008 the arbitration procedure for resolving rate disputes. During this two year period, all rate filing disputes would be settled according to the Administrative Procedures Act within the Department of Administrative Hearings.
• Require an oath of truth, with penalty of perjury, for rate filings. Rate filings must be signed by the insurance company’s CEO or CFO and actuary. The signed oath must state the rate filing reflects all premium savings reasonably expected to result from legislative enactments. Violation is an unfair trade practice, subjecting the insurance company to disciplinary actions against its license.

2 • Require insurance companies to evaluate the hurricane-security of a structure rather than the date of construction when determining risk. Age of the home may not be used as the sole reason for rejection of coverage.

3. Require participation in the Florida property insurance market (Cherry Picking)
• Require any insurance company that writes homeowners policies in other states and writes auto insurance in Florida to sell homeowners insurance in Florida, unless the affiliate writes homeowners in Florida. This is effective January 1, 2008.

4. Additional Miscellaneous Insurance Company Accountability Measures
• Require insurance companies to provide greater loss reporting information to OIR.
• Require insurance companies to give at least 100 days written notice, or written notice by June 1, whichever is earlier, for any non-renewal, cancellation, or termination of a homeowners’ policy that would be effective between June 1 and November 30.
• Require insurance companies to expedite payment of claims following a storm. Insurance companies must pay or deny property claim within 90 days of notice of the claim with an exception for factors beyond the control of the insurer. Violation is subject to penalty under the Insurance Code, subjecting the insurance company to disciplinary actions against its license.

Ok, this has 0% to do with real estate BUT 100% to do with your wallet.

DISCLAIMER: I receive no compensation from this blog post EXCEPT for knowing I may have saved you a buck or 2!

I have been a client for a MAJOR insurance company since I received my first car - actually, my family has been with them since before I can remember. They have a local office and always send me nice reminders and notes saying they appreciate my business. My wife and I pay appr. $2500 for better than average coverage on a 2000 SUV and a 2006 sedan with a 5-star safety rating. We have excellent driving records, good credit, and are both over 25.

I have watched my monthly bill creep up ever so slowly but have felt that my long-standing relationship with them justified the ever-increasing policy price. Then my brother called me with a tip: 21st Century Insurance out in California. First, the thought of NOT having a local insurance office scared me. Second, their coverage could not be better than what I had. I was wrong on both points.

21st Century Insurance (www.21st.com) has been rated "A+" by Standard and Poor's for the last 5 years. They are a new provider to Florida, having only been in-state for 10 months. Please do your own due diligence, as they may not be the best company for you, but my new premium, WITH BETTER COVERAGE in PIP, RENTAL CAR, COMPREHENSIVE DEDUCTIBLE, etc, is 50% of what I was paying with my old company.

Don't take my word for it - go to their website and give it a try. I had a no-hassle, no hard-sell experience. My 21st agent, Charles, said the numbers would speak for themselves - he was 100% right.

Any questions, call or email me -

Rich C.

Sand Key Realty

Here's a new twist on home improvements!

My brother received estimates to remove his curent stair assembly and replace it with something sleeker and more appealing. He received a quote of $8500 and, considering the fabrication and work involved, he accepted the contractor's offer. So good so far.

He was required to put 1/3 down to cover the costs of obtaining the parts and start fabrication of said parts. He was also told that on each 1/3 payment, he would have to pay 7.5% sales tax. My brother consented and gave the contractor the money. In conversation with one of his friends, my sibling found out that when repairs or renovations are made to real property, the contractor will pay the initial sales tax on materials and pass the costs along to the consumer in the form of a lump sum bid. In my brother's case, the contractor gave him the bid and THEN charged him sales tax on the total. It was only an honest oversight, but one that might have cost my brother an additional $637.50!

Here is the Q & A from the FL Department of Revenue website:(http://dor.myflorida.com/dor/taxes/quick_answers.html

Are parts and labor taxable?

In Florida, the taxation of parts and labor varies according to the exact nature of the transaction. The general guidelines are as follows:

Repairs or improvements to real property

As provided in Rule 12A 1.051, Florida Administrative Code, transactions that involve elements that are permanently installed into a structure, where they cannot be removed without destroying them in the process, are generally classified as real property contracts and are not subject to sales tax. For example, a central air conditioning unit would be considered a real property improvement, therefore repairs or service to the unit would not be subject to sales tax.
When performing repairs or improvements to real property, the contractor generally offers the customer a lump sum, cost plus or fixed fee, or guaranteed price contract. In these types of contracts, the contractor or subcontractor is considered the ultimate consumer of the materials and supplies used in performing the service. The contractor or subcontractor pays the sales tax to the supplier at the time the materials and supplies are purchased and recovers the cost of the material within the contract price quoted his customer. The labor is not subject to sales tax.

So save yourself the money - now you know the law!

Regards, Rich C.

Here's a new twist on buying and selling real estate...

"We will trade for any real estate"

"My wife and I are the second owners of this beautiful yacht, which we have owned for four years. No expense has been spared in maintaining it. The boat has several "one of a kind factory features," such as an office, oversized TV, oversized rails and ladder and teak and holly floors. The boat is simply impeccable!"

If you're interested, call me 727.417.8814 -

Rich C.

I do a little foreclosure investing on the side. Lately, I can't keep up with it. What was a paltry number of foreclosures per week has grown to over 140 LAST WEEK. That equates to about 500-650 PER MONTH. From conversations with Title agents and mortgage professionals, it appears to be only the tip of the iceberg. All those buyers with 100% mortgages gained through CREATIVE FINANCING may feel a bit of pain when their mortgage company requires more $$$ every month for increased taxes. Coupled with skyrocketing insurance costs, it's a sure recipe for increased foreclosures.

If you want more inforamtion onnhow you can wade into the foreclosure market, please call or email me.

-Rich

FreddieMac Weekly Mortgage Survey:

"Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 6.18 percent with an average 0.4 point for the week ending December 28, 2006, up from last week when it averaged 6.13 percent. Last year at this time, the 30-year FRM averaged 6.22 percent."

source: www.FreddieMac.com