PALMETTO BAY, Fla., March 13, 2009
It has recently come to the attention of the Village Council that a new tactic is being used by insurance companies to increase their premiums -- and their bottom lines -- by reevaluating and increasing the value of insureds' home replacement costs. Several individuals have had valuations that they believe are well
in excess of actual rebuilding costs, in one instance an increase of almost 70 percent above an independent appraisal. This is during a year when home building costs have decreased
. There is no easy way at this time for a homeowner to successfully challenge the insurance companies on such a matter.
The Village of Palmetto Bay passed a resolution
March 2 asking the State of Florida to protect homeowners by finding methods to resolve this tactic and by putting in place controls regarding inflated appraisals being performed by insurance companies. Most homeowners have mortgages and have their insurance paid by the mortgage holder with the amount added to their monthly payment. During these difficult economic times when so many residents are struggling to meet current mortgage payments, the additional insurance cost may force them into foreclosure.
If you have been notified by your insurance company of a significant raise in your home's value -- which you believe is unwarranted -- we encourage you to contact
the Florida Department of Financial Services, the agency charged with regulating the state's insurance industry (850-413-3100). For its part, the Village will carry this matter through our lobbyists to the State Legislators and the State Insurance Commissioner during the next several weeks.