Q: What exactly is happening?

A: Two insurance companies, Tower Hill Signature Insurance Co and Tower Hill Preferred Insurance Co, are dissolving because they have not been profitable, and didn’t have enough surplus funds to write the volume of insurance policies needed to be profitable and offer reasonable rates. All of their policies, are being transferred at their renewal, into Tower Hill Insurance Exchange.

 

Q: Why are they doing this, and how does an “Exchange” model instead of an “Insurance Company” model help me?

A: The exchange will have more capacity to write more policies – and spread the risk over a larger number of people keeping premiums down as much as possible. With an exchange, instead of ownership of the entity by investors or individuals, the members are the owners and share in the profits. (Think USAA, Erie Insurance, Farmers Insurance, etc). As the entity makes a profit, they will (with oversight from the Office of Insurance Regulation, OIR) distribute those profits into subscriber savings accounts for each policy owner. Those funds are available once you end your policy because you sell your house, go to another insurer, etc.

 

Q: Who are all these different entities?

A: Tower Hill Insurance Exchange – this is the entity that is responsible for collecting money, and paying claims and paying for the operation of the insurance business.

 

Tower Hill Risk Management – This is the entity who is the “Attorney in Fact”. That means, Tower Hill Risk Management is appointed by the Exchange to be responsible for managing the day to day operations of the exchange such as managing the funds, reviewing and sending paperwork, etc. TH Risk Management does all the work; TH Insurance Exchange holds the money from premiums, surplus contributions, for payment of claims.

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Tower Hill Preferred and Tower Hill Signature Insurance Companies – those are insurance companies who are privately owned, and are being dissolved in favor of the member/policyholder ownership model instead.

 

Q: What do I need to do?

A: Almost nothing. Everything happening is being facilitated by Tower Hill Insurance. The only thing you will eventually need to do is read, sign, and return the “Subscriber Agreement” – since you’re an owner, but not involved in the day to day operations, you have to appoint an “Attorney-In-Fact” which is a fancy way of saying, you (as an owner) are just appointing someone else to make operational decisions for the entity on your behalf. You will get docs by mail, and if Tower Hill has your email on file, they will send you the paperwork through Docusign to review and approve.

 

Q: Are there any differences from my prior policy?

A: Yes, there are some. The goal was to be as similar as possible. There are mostly small differences in policy language/coverages with a few notable and important exceptions. Here are the ones that we think are the most important to know.

SOLAR PANELS are now excluded on the standard policy (to keep premiums down for those without panels) and you can buy back solar panel coverage if you have them and want to have them covered.

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ANIMAL LIABILITY is now excluded on the standard policy (to keep premiums down for those without animals or who do not want to pay for that coverage) and you can buy back coverage if you choose. Even if you previously purchased their limited animal liability coverage, it may not have transferred to your new policy and you will need to read your actual policy documents – or just call our office and ask. We can very easily help answer that question and get it added back if necessary. Please review your actual policy language to confirm it is set up how you intended.

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UNPROTECTED POOL LIABILITY is now excluded. If you have a pool without a lockable fence, screen enclosure, or otherwise secured (to keep a little kid out) you will not have pool liability coverage if something bad happens related to the pool.

 

Q: Are my rates going up because I’m going into this “exchange” thing?

A: Rates overall are going up but not because of the “exchange” model. Florida’s homeowners insurance market is in major crisis, mainly due to roofing/insurance fraud. Because of the broadness of home insurance policy wording (to help make sure people are taken care of if there is a claim), many attorneys and roofers are taking advantage of the current legal system to cause insurance companies to put new roofs on houses where the only actual damage is having been in the Florida wind and sun for 15-20 years. Policies have never been priced to simply pay when things ‘wear out’, but due to the nature of Florida Law, the OIR requirements and inflexibility, and some really bad actors out there – most carriers are losing TONS of money as a result. Several insurance companies failed (premiums they charged were not enough to cover all claims) in 2020 and 2021 …. WITHOUT any major hurricanes or other catastrophes. All of that to say – Yes rates unfortunately are up across the board, and in many cases up 50-100% in a single year (and companies are still not making a profit). But the rate increase is not specifically due to the “Exchange” model.

 

Q: I have more questions. Who do I talk to?

A: You can check out the Tower Hill website at https://www.thig.com/tower-hill-insurance-exchange/ for some more details, or you can call the office at 850-329-6996 or email us at service@insurancemh.com and we can answer specific questions about your policy, coverages, etc.

 

Q: How will I know if the docusign subscribers agreement they send me is legit or phishing?  

A: It will come from the email noreply@thig.com – and the heading will be: Important Notice from Tower Hill Insurance: Your signature is required. Here’s what it will likely look like: