Should You Keep Your Homeowners Insurance with Allstate, Nationwide, and State Farm?

Allstate, Nationwide, and State Farm (The Big Three) deserve credit for the homeowners insurance coverage they are still providing to a large number of Floridians:

• Homeowners insurance in Florida has been extremely challenging since Hurricane Andrew.
• Ask yourself whether you would want to insure homes against hurricane wind damage in Florida. Most of us would not. Yet for many years the Big Three have been taking this risk and paying out millions of dollars in claims.
• Because of their size, they have the financial capacity to write a very large number of policies in Florida.
• Even though it's been years since the Big Three have written any significant amount of new business, they still comprise a huge percentage of Florida's private homeowners insurance market.

All of the above are factors that might make you reluctant to leave the Big Three.

But let's face it. Your number one reason for staying with the Big Three might be because someone has convinced you that your home is too old or too close to the coast to find coverage with another company.

If you think that you don't have any other options, take a look at a question recently posted by a new Florida homeowners insurance agent on Yahoo Answers:

What is the best way to market homeowners insurance in Florida?

The insurance agent in this post makes three critical points:

• The average consumer "thinks" there is no alternative to the Big Three.
• There are several small companies writing policies in Florida with great rates, but the captive agents of the big boys can't write them so people don't really know.
• This quote from the agent says it all: "I honestly haven't had a single lead who I couldn't save hundreds, maybe more than a thousand dollars a year."

If a new insurance agent with a 100% success rate with saving homeowners up to a thousand dollars per year doesn't convince you, consider the following:

• The cost of Big Three policies continues to increase dramatically - even with the 2007 Emergency Legislation rate reductions.
• All three companies have been significantly impacted by disasters nationwide, not just in Florida. So their cash reserves are being stretched not just by the Florida hurricanes but by fires, tornados, and mudslides nationwide, not to mention huge losses from Hurricane Katrina on the Gulf coast.
• All three carriers continue to shed policies or reduce the number of policies they will underwrite. No matter how long you have been with them, there is always a risk that they will drop you anyway.
• Policies dropped by the Big Three have to be absorbed by the rest of the private market or by Citizens Property Insurance Corporation. Because these companies are so large and still hold so many policies, any time they announce cancellations there can be a large rush to find other insurance in the private market - a game of musical chairs where you don't want to be the last one standing without a chair.

If you are fed up with the high cost and uncertainty of the Big Three, this is a good time to shop your policy - while there is still some limited capacity in the Florida private homeowners insurance market with some smaller carriers.

The Home Insurance Buyers Guide can help you find other private insurance options with companies that are investing in Florida, growing their market share, and taking on some of the policies being cancelled by the Big Three.

Now is the time to act - before another round of major cancellations occur and you are the last one standing when the music stops.

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