Increasing Florida Premiums

 

The Florida homeowners' insurance market has been facing several challenges in recent years, which have significantly impacted both insurers and policyholders. These challenges are primarily related to the state's unique geographic and environmental factors, such as its susceptibility to hurricanes, tropical storms, and other natural disasters. These factors have made it increasingly difficult for insurers to accurately predict and manage their risk exposures in the state.

One of the most notable trends in the Florida homeowners' insurance market is the consistent increase in insurance premiums. Over the past few years, homeowners in Florida have experienced rising insurance costs, with many seeing their premiums double or even triple. This increase in premiums can be attributed to several factors:

·         Catastrophic Events: Florida's vulnerability to hurricanes and tropical storms has led to a surge in insurance claims. The damage caused by these events has resulted in significant financial losses for insurance companies, prompting them to raise premiums to maintain financial stability.

·         Reinsurance Costs: Insurers often purchase reinsurance to protect themselves from catastrophic losses. The increasing cost of reinsurance, driven by the frequency and severity of storms in Florida, is being passed on to homeowners in the form of higher premiums.

·         Litigation and Fraud: The state has also faced issues with increased litigation and insurance fraud, leading to higher claim costs and subsequent premium hikes.

·         Regulatory Challenges: Florida's complex regulatory environment, including restrictions on rate increases and underwriting practices, has created uncertainty for insurers, making it difficult to balance risk and maintain profitability.

·         Market Consolidation: Some insurance companies have withdrawn from the Florida market or reduced their coverage, leading to a reduced competitive landscape and higher premiums.

Considering these factors, it is likely that the trend of rising homeowners' insurance premiums in Florida will continue in the near future. The state's exposure to natural disasters, litigation challenges, and regulatory constraints all contribute to the upward pressure on premiums.

Sadly, a few of my clients have shared that they simply cannot afford to live in Florida any longer.  In many cases their annual insurance premium exceeds their annual mortgage payments! It is also disappointing to lose clients to agencies selling “B” or “C” tier” policies – insurers that cannot afford to pay claims.  There are alternatives that allow you to stay in the “A” tier.  To mitigate the impact of these rising premiums, it is essential for homeowners to explore various options, such as increasing deductibles, lowering personal property coverage, or improving home safety measures, to potentially lower insurance costs. Additionally, engaging with me to ensure you have the best coverage for the least amount remains crucial.  Please call me if you find the premiums stressing your budget to the point where you consider selling your piece of paradise.

In conclusion, the Florida homeowners' insurance market is facing a challenging environment characterized by increasing premiums. While it is challenging to predict the exact trajectory of premiums, given the state's unique risks, it is essential for homeowners to stay informed, review their policies, and explore strategies to manage their insurance costs effectively.

Please reach out if you have any questions or require further information.

Make It Count

Accidents happen.  We all pay for homeowner’s insurance to mitigate disasters caused by a host of things like storms, fires, and water.  Florida homes are expensive to insure compared to most places around the country.  We tend to favor higher deductibles to offset high annual premiums.  In Florida, the insurers split the deductibles for the type of peril:  One deductible for hurricanes and the other deductible for “all other perils,” or AOP.  The hurricane deductible tends to be 2% of the dwelling amount and AOP a flat $2500.  Keep in mind that you can adjust these deductibles in either direction - it is logical that lowering deductibles will cost more.

If you encounter a small peril, you might be inclined to call your insurer to determine if you are covered and whether you should file a claim. A new claim is opened with the insurer upon your call.  You may later decide to pay the damage outside of insurance, especially if the cost to repair ends up being less than the deductible.  The insurer will still notify the Comprehensive Loss Underwriting Exchange (CLUE) of your claim.  Once a CLUE incident is open, it remains on your personal report for 5-7 years.  Most insurers will not sell you a policy with a CLUE incident.  Therefore, your insurer mandated having your SSN on your application at the time your policy was bound.  Most insurers, will, however, accept a new policy after a CLUE incident seasons for at least three years. 

I invite you to call me personally before you call your insurer.  Let us discuss options and possibilities prior to opening a CLUE event on your record.  If you have a major peril, then by all means, make the claim – it is why you pay expensive annual premiums!  The bottom line is to make a claim count and not simply create a CLUE incident that will likely eliminate the freedom of moving to any insurer for at least three years.  Do not forget, I re-bid your home with all Florida A-Rated insurers each year so that you are always guaranteed the best coverage for the least amount.