Make us your home page


Robert Trigaux

What happens as more seniors retire with mortgages then opt to 'go naked' in coverage?



citizens-property-insurancelogo.jpgWake up and good morning. Two converging trends are noted in the press that can't be good.

First, more baby boomers are retiring while still paying mortgages on their homes. And some will continue paying into their 90s. So says this story in the South Florida Sun Sentinel. The financial planners quoted in the story say keeping a mortgage can be useful in some cases, especially for seniors who need mortgage deductions to reduce taxes or if the financial pressure to pay off a mortgage early is too great.

What financial planners don't spend enough saying is how much homeowners insurance, required for those with mortgages, will hurt seniors in the coming years.

Trend No. 2, reported by the Tampa Bay Times here, however, sheds light on this risky strategy by some seniors. With the cost of insurance soaring, many seniors in Florida are choosing to drop their homeowners insurance completely and bear the risk of a hurricane hit on their own. That's known as "going naked." Seniors (or anyone) who own their own homes and do not have a mortgage have the option of dropping their insurance coverage. (Mortgage lenders demand insurance on homes still paying on their home loans to protect the banks' investments.)

The key reason for going naked in Florida (other than the heat, of course) is the ever rising cost of homeowners insurance that is putting severe pressure on homeowners but especially seniors on fixed incomes.

This trend is compounded by these events.

Citizens Property Insurance is aggressively using reinspections of homes covered by the state insurer to raise rates, says this Tampa Bay Times/Miami Herald report.

* Citizens' board voted to raise premiums an average of 10.2 percent, the Miami Herald reports. It's part of a conspicuous strategy by Florida Gov. Rick Scott to force Floridians to find cheaper insurance from private insurers in the state.

* Citizens is canceling hurricane coverage for all homes valued at more than $1 million will force homeowners to buy more expensive private coverage, says this Palm Beach Daily News report.

Isn't it funny how Gov. Scott is so eager to make Florida more attractive to businesses so they can create more jobs, yet he simplistically alienates homeowners -- the people those businesses will want to hire -- who will think twice about buying a Florida home when mandatory property insurance is sky high and going higher.

That formula just won't work.

-- Robert Trigaux, Business Columnist, Tampa Bay Times



[Last modified: Tuesday, August 14, 2012 8:19am]


Join the discussion: Click to view comments, add yours