Many new business owners and consumers who attempt to buy commercial insurance in Miami for the first time are surprised by the level of difficulty they encounter. This is especially prevalent where consumers have had a longstanding relationship with a Carrier in another location; & upon moving or establishing themselves in Miami, they find out the relationship has been severed, based upon their domicile. We will attempt to go through some of the issues that cause this disruption.
For those of you new to Florida, because of all sorts of issues, especially exposure to Hurricanes, the entire State of Florida is a hard market relative to the rest of the country. All sorts of Property insurance is more expensive as a result. Additionally, Liability claims can often emanate from a property loss can drive costs up even for Casualty (i.e. the wind knocks over your flag pole into your neighbors roof. Now you have a property claim – broken flag pole + a Liability claim – damaging your neighbors roof). As a result of these challenges, many national insurance carriers – think Travelers, Hartford, Safeco, Liberty Mutual, CNA, Chubb, etc… are quite reluctant to place new business within the State unless it is an accommodation, or their risk is somehow limited. Miami is at the epicenter of this elevated exposure being most exposed to storms.
Secondarily, South Florida has a high level of insurance fraud. This is partly related to the hard market (where insureds try to get claims covered that should not be) plus other demographic factors which are beyond me. However, the numbers are clear; fraudulent claims are higher in Miami. As such, the limited carrier appetite for South Florida business is further diminished.
On a more micro level, there are statutory laws that affect the placement of certain policies. For example, based upon certain laws within the State, it is not the easiest place to secure Workers’ Comp coverage. This is based off of a carriers inability to deviate on price off of a published State guide. As such, if a carrier does not feel they can charge enough, they simply will not offer coverage for that class of business. As a result, someone coming from another State may be surprised to learn that his industry seems to be not welcome.
Finally, many national carriers have filed forms with the state Dept of Insurance which includes property coverage on their package products & the property has no wind exclusion. These national forms were not amended for Florida. Many of these carriers do not want to offer wind coverage on property in Miami so it is an Automatic Decline even if the intent is to really only cover General Liability.
There are options and specific markets that address and navigate these changing obstacles. Having a knowledgeable and highly experienced broker representing you is key.
Call us or text us at 561-287-6279, we will help you.
Marc Rovner, www.rovnerco.com