In this weekly insurance claim update, we look at a situation in Florida involving increased policy rates. Some policy holders also did not even realize that they were paying more too.
Duval County Florida
Homes in Duval County cost more to insure simply because of their location. 23,000 homes and businesses in the county have inflated insurance costs due to the distance they are from a fire station or a fire hydrant. This data is gathered by the Jacksonville Fire Department.
What's your number?
The system assigns a number to your home or business according to your proximity to a fire fighting source. A number 10 can expect higher costs.
How it works?
If your home or business is located over 1,000 feet from a fire hydrant, your property would be rated Protection Class 8 (PC 8). More than five miles from a fire hydrant will cost you even more; and you will be rated PC 10.
What is the logic behind the system?
The idea is that if you reside or work closer to a fire hydrant or fire station, it will be easier to fight a potential fire. The farther away you are, the more expensive the claim is likely to be. Rural areas already pay more for insurance, since they are indeed farther away from fire department assistance. But more populated areas in the county are finding high policy costs too. Many insurance companies do stay with the five-mile rating. Some raise rates even if only in the tenths of miles. Other companies are more lenient.
For example, a 2,600 square foot house built in 2005 and valued at $350,000 would cost $3,074 per year to insure if located in PC 10. If that house were located in PC 1, it would only cost $1,565 to insure. Note the extreme discrepancy.
Why the complaint about the higher costs now?
Many homeowners did not until recently realize that they resided in these riskier Protection Classes, and did not realize they were paying more.
Other residents are finding that insurance companies will not provide quotes for insurance policies when they are requested. Fire station and fire hydrant distances negatively influence costs, and companies are hesitant to alert potential policy holders of rates or differences in rates between communities.
How much is this costing consumers?
In Duval County, thousands of homes are in the PC 8 and PC 10 areas. When you add up the premiums paid by these policy holders, the cost reaches $32 million.
Some communities are discussing building more fire stations. But what do consumers do while they wait for these to be built? Temporary stations are a possible solution to bridge this gap in time. Empty strip malls or un-leased buildings are perfect locations for this purpose.
More hydrants please!
A few communities have combined efforts with fire departments to install more hydrants. Tanker trucks have also been added to higher risk areas.
Living in a high risk area can cause you to pay much higher rates and may result in denials. If your claim has been denied, contact us today. We specialize in getting clients the money they need after their insurance company denies their claims (Commercial, Industrial and Residential).