Villages Homeowners Insurance Company?

[TVTVTV]

It would seem like a good business opportunity for The Vllages to open their own homeowners insurance company. Given the relatively small amount of homeowner claims in this generally safe central Florida area, it would seem very profitable if The Villages opened their own homeowners insurance company . if they insured only Villages homes, and they know the building criteria used and have easily accessible data, it seems like they would make a huge profit here and help all us homeowners with these outlandish rate increases from the other companies.

Just as their huge Citizens First bank is for profit with brick and mortar bank branches all throughout The Villages, what would be the reason they would not set up their own insurance company for profit with reasonable rates in service Only The Villages? Seems like another great for-profit company the developer should look into - a win-win.

[retiredguy123]

Wow. Setting up an insurance company would require a huge financial investment to cover potential damage claims. The Federal Government requires insurance companies to have a very large amount of assets in reserve to pay claims.

[kkingston57]

Wow. Setting up an insurance company would require a huge financial investment to cover potential damage claims. The Federal Government requires insurance companies to have a very large amount of assets in reserve to pay claims.

Have the right idea on reserves but they are created by the state not the Federal Government. In addition, most of the homeowners' companies are Florida only companies.

Why would a developer want to get into the insurance business? I was in the biz and when I was working (1979-2020) they were doing good when they had underwriting profits in the 5% range. Agree they were making other money on re investment of the premiums but like you said that money could only be in reserves or in very conservative investments. It only takes one bad year(like Andrew in 1992) to wipe out those 5% underwriting profits

We still live in the highest areas of lightning in the US. We have had 3 bad lightning strikes in our neighborhood(90 homes) that caused damages totaling over 500K in past years

[Stu from NYC]

If the developer thought he could make a good ROI long term would have done it years ago

[LuvtheVillages]

It is extremely bad risk management for an insurance company to have all its customers in a small area. One bad event - wild fire, lightning storm, etc, - could wipe out the company's reserves and force it into bankruptcy. Then no one gets any settlement.

[JRcorvette]

Wow. Setting up an insurance company would require a huge financial investment to cover potential damage claims. The Federal Government requires insurance companies to have a very large amount of assets in reserve to pay claims.

Insurance companies are regulated by the state not the federal government

[justjim]

In short, the Developer (private company) is making millions doing what they are doing. They build in a CDD, sell houses, finance many of them through their privately owned bank and it’s a “dream” business model that makes the family billionaires. No need to fix something that is not broke.

[Pairadocs]

If the developer thought he could make a good ROI long term would have done it years ago

Definitely ! They only do profitable, not in the business of not profitable. Residents once had a VERY affordable alternative to cable and satellite TV providers. It was a very attractive reason for retirees to build/buy here, but it was not profitable. Just as the entertainment nightly is a big draw, I believe the state tax money for tourist development eventually ended ( I think, could be the developers still get tourist development money (?), but I suspect that if the area businesses had not picked up the tab, we would not be having nightly entertainment... it would be a loss leader if it came out of profits of the development.