[Topspinmo]

Originally Posted by mikemalloy

I have some experience with insurance companies created by groups such as doctors when their insurance costs had large increases. It appears to me that the current rise in insurance premiums comes from a combination of increases in cost of repairs such as lumber prices, and the losses they sustained from hurricane Ivan.
It seems to me that The Villages is located far enough away from the coast that severe damage from hurricanes is a slight threat. Similarly, the flooding damages we've seen like those along the St. John's river are also much less likely here. I wonder if we in The Villages are subsidizing the risks found in areas susceptible to catastropic damages.
My question is, would it be possible for The Villages residents to self insure? Could we form our own insurance company? I"m not familiar with what the state requirements are for capitalizing an insurance company perhaps some of you have some information about that.
I'm sure that the premiums we are paying are much higher than they need to be and that self insuring if possible would be a benefit to us all. Thoughts?

So you want get into legalized racketeering? Sorry only few sorority members are allowed.

[thelegges]

At our last renewal, we got an email and a letter asking if we wanted to change or drop the Hurricane part of our policy. Savings $689, policy would drop to $429 premium.

Still waiting for what would be covered if we went that route. So sort of self insured, but no mortgage company would allow that clause to be deleted.

[mikemalloy]

Originally Posted by dewilson58

5000 homes, say $500,000 replacement value creates $2.5B in exposure, would need 250,000,000 in reserves.

All those premiums don't even cover 1/2 of the reserve requirements, not to mention claims paid over the 15 years, operating expenses, etc.

First of all the one tornado incident that people refer to probably effected less than 1% of the villages homes. If some catastrophic event took out 5,000 homes we probably wouldn't be around to worry about rebuilding.

[kkingston57]

Originally Posted by mikemalloy

I've lived here 10 years. You mention one incident that occurred over 15 yrs. ago. Consider what the premium collection from 5,000 homes over those years would have been. The company could have easily covered all the claims.

5000 homes? Potential pool of people who might want to self insured probably closer to 50K. Some of these newer Florida start up insurance companies have that many policies

[kkingston57]

Originally Posted by Stu from NYC

Somewhere along the line either the developer or someone approached them about this.

If they thought this would make them money without great risk it would have been done

Developers are great biz people. Part of the reason is that they stick to their expertise, land development and home sales. Insurance is a different animal. Good long term insurance returns are in the 5% range and comes with a lot of risk.

[kkingston57]

Originally Posted by BrianL99

Self-Insurance and setting up an Insurance company, are 2 completely different tracks.

Anyone can "self-insure". Just don't buy insurance ... BINGO! You're self insured. Or even buy a policy with a $50,000 -$100,000 deductible ... you're most self-insured.

As for setting up an insurance company?

Insurance companies that have been in business for generations, are going broke and moving out of Florida. Even if the obstacles others have mentioned weren't real (they are), what makes you think a bunch of retired folks, setting up a mutual insurance company, would be better at it, than the pros?

Good points but I feel that the biggest reason that this might work is that TV is in the middle of the state and would not have any risks in the high risk areas like near the coast. We are now subsidizing the people on the coasts. State of Florida might not allow an insurance company to ONLY do business in 3 counties. Coastal counties would then go up 3-4X more as there would not be a spreading of the risk(that is what insurance is)

[kkingston57]

Originally Posted by Shipping up to Boston

Crickets!

I was in the adjusting biz for 40 years and most of the threads here do make sense( good or bad). Ideas could be explored but like all else, big businesses will win out.

[Shipping up to Boston]

Originally Posted by kkingston57

I was in the adjusting biz for 40 years and most of the threads here do make sense( good or bad). Ideas could be explored but like all else, big businesses will win out.

Exactly