Too Little, Too Late? Breaking Down Floridas Latest Property Insurance Reforms


The Public-Private Partnership Investment Program involves government loans and guarantees to encourage private investors to provide funds to purchase toxic assets from banks. The crisis hit a critical point in September 2008 with the failure, buyout or bailout of the largest entities in the U.S. shadow banking system. Investment bank Lehman Brothers failed, while Merrill Lynch was purchased by Bank of America. Investment banks Goldman Sachs and Morgan Stanley obtained depository bank holding charters, which gave them access to emergency lines of credit from the Federal Reserve. Government-sponsored enterprises Fannie Mae and Freddie Mac were taken over by the federal government. Insurance giant AIG, which had sold insurance-like protection for mortgage-backed securities, did not have the capital to honor its commitments; U.S. taxpayers covered its obligations instead in a bailout that exceeded $100 billion.

By September 2009, this had risen to 14.4%.Between August 2007 and October 2008, 936,439 US residences completed foreclosure. Foreclosures are concentrated in particular states both in terms of the number and rate of foreclosure filings. Ten states accounted for 74% of the foreclosure filings during 2008; the top two represented 41%. Nine states were above the national foreclosure rate average of 1.84% of households. In addition to considering higher-risk borrowers, lenders had offered progressively riskier loan options and borrowing incentives. In 2005, the median down payment for first-time home buyers was 2%, with 43% of those buyers making no down payment whatsoever.

Also rejected was allowing property insurers to offer homeowners to purchase a stated value limit for roof coverage and implement a reimbursement schedule for total losses to a primary structure. In the case of an automobile that is totaled in an accident, for example, the insurance company would typically pay the actual cash value of the vehicle after determining its replacement cost and subtracting factors such as depreciation and wear and tear. Under replacement-cost coverage, the insurer would pay the amount required to replace the covered item with a like-kind new one. For example, James owns a house with a replacement cost of $500,000, and his insurance coverage totals $395,000.

Save on your auto and homeowners insurance with a qualified life insurance policy. Sometimes, insurance companies use actual cash value to determine the amount to be paid to a policyholder after loss or damage to the insured property or vehicle. There isn’t a type of insurance called ACV insurance, for example, that’s a misconception. Fire insurance covers damage and losses caused by fire and on which date does the length of daylight get progressively longer going south from the equator? is often purchased in addition to standard homeowners insurance. Because improvements to a home and inflation affect home values, homeowners should review their insurance policies periodically to ensure their coverage meets the 80% rule. While insurance companies stretch claims out for as long as possible in some cases, in others, they rush to make settlement offers as quickly as they can.

Further, shadow banks were able to mask the extent of their risk taking from investors and regulators through the use of complex, off-balance sheet derivatives and securitizations. Economist Gary Gorton has referred to the 2007–2008 aspects of the crisis as a “run” on the shadow banking system. Several other factors set the stage for the rise and fall of housing prices, and related securities widely held by financial firms. In the years leading up to the crisis, the U.S. received large amounts of foreign money from fast-growing economies in Asia and oil-producing/exporting countries. This inflow of funds combined with low U.S. interest rates from 2002 to 2004 contributed to easy credit conditions, which fueled both housing and credit bubbles. Loans of various types (e.g., mortgage, credit card, and auto) were easy to obtain and consumers assumed an unprecedented debt load.