If you own a home, you’ve probably noticed that property insurance in Florida has been skyrocketing. Even if you haven’t personally experienced higher premiums, it’s likely that you’ve at least heard about Florida’s insurance crisis.
According to the Insurance Information Institute, Florida had the most expensive home insurance premiums in the country as recently as 2021—nearly twice the national average!
So how did we get to this point?
As one of Florida’s top independent insurance agencies, Darr Schackow believes it’s important for homeowners to have as complete a picture as possible about their coverage. Let’s take a closer look at Florida’s property insurance crisis to explain how we got here, what’s being done to provide relief, and—most importantly—what you can do about it.
Florida’s Home Insurance Crisis Explained
So, what’s causing Florida’s rising insurance rates? As it turns out, there are several key factors unique to the Sunshine State that can explain our current insurance market.
Weather
From sinkholes to hurricanes, Florida is no stranger to natural disasters. But we’re not only disaster prone—Florida is also the third most populous state in the nation. There are simply so many houses that are exposed to risk!
Hurricanes tend to cause the most damage. For example, in 2022, Hurricane Ian caused $112 billion in damage, making it the costliest storm in Florida’s history.
Fraud
Exaggerated, misrepresented, and downright fraudulent claims contribute to the drain on insurance carriers, but one of the most prevalent insurance-related scams comes from roofing companies.
There have been multiple documented instances of dishonest roofing companies in Florida who exaggerate or even lie about roof damage to collect money from your insurance company. In some cases, these companies have even been known to cause damage deliberately!
Lawsuits
Despite having only 9% of the nation’s homeowners claims, Florida files a whopping 79% of the nation’s insurance lawsuits.
Litigation is expensive! And when insurance companies are forced to pay attorney fees in addition to claims, it drains their coffers much faster.
The Results
The combination of expensive claims, fraud, and lawsuits place a huge drain on insurance companies. In order to stay in business, however, insurers must take in more money in premiums than they pay out in claims.
To help balance the books, insurers end up raising premiums, limiting coverage, not renewing policies, or even leaving the state entirely.
What Is Being Done
The good news? Florida’s insurance crisis has not gone unnoticed!
In December of 2022, the State Senate passed Bill 2-A, which introduced some major changes in the hopes of slowing down (and eventually reversing) premium hikes.
Here are some of the highlights:
- The deadline for policyholders to file a claim has been reduced from two years to one year.
- The deadline for insurers to pay claims has been reduced from 90 to 60 days.
- One-way attorney provisions have been repealed, which means that insurance companies will no longer pay policyholders’ attorney fees.
- Assignment of Benefit (AOB) Agreements are prohibited.
What’s even better is that these reforms seem to be working.
Home insurance rate increases were 80% less than originally expected and Florida Insurance Commissioner Michael Yaworsky issued a statement saying that “Florida’s insurance market continues to strengthen.”
What You Can Do
It may take several more years before Florida’s homeowners insurance crisis is completely solved, but that doesn’t mean you are helpless until then.
First of all, if your rates are skyrocketing or your policy isn’t being renewed, know that you do have options!
Even though several insurance companies have pulled out of Florida in recent years, several more have been approved to start issuing policies. When it comes to insurance, more choice often equals better rates.
Second, as tempting as it is, think carefully before you switch to Citizens and don’t purchase coverage with them if you have other options. Citizens’ premiums may appear lower, but their coverage can be limited.
Protect your home against storm damage and/or get a wind mitigation inspection for a quick and easy discount on your insurance premiums if you’ve replaced your roof recently!
Finally, if you find yourself struggling to pay your premiums, contact Darr Schackow.
As an independent insurance agent, we have access to carriers and policies that others don’t. Furthermore, we can guide you toward the policies that will give you the biggest bang for your buck.
Let Us Help You Solve Your Insurance Problems
Florida might be in the midst of an insurance crisis, but the tide is starting to turn. And what’s more, there are ways that you can get the most out of your coverage and find the policies that are right for your needs and your budget.
At Darr Schackow Insurance, we aim to simplify the process of finding home insurance by discussing your needs and presenting you with a wide range of great coverage options.
Give us a call today to get started!