Homeowners in Florida struggle with insurance issues more than those in any other state.
We give you the most recent data, an estimate of the cost of a house insurance policy, and instructions on what to do if your Florida home insurance provider cancels your policy or goes out of business.
Comparing The Cost Of Affordable Florida Homeowner’s Insurance
For a typical property with $350,000 in dwelling coverage, Florida home insurance costs an average of $2,030 per year. According to Forbes Advisor’s review of 12 Florida insurers, Progressive is the least expensive provider of this level of coverage for homeowners insurance. Below, you can see more average prices.
The Cost Of Florida Home Insurance Has “Degenerated Into A Racket,”
Only 8% of all national property claims are made in Florida, a state with a population approaching 22 million. However, Florida accounts for more than 75% of all property claim cases, many of which politicians allege to be unfounded.
Due to the state’s Assignment of Benefits (AOB) law, Florida home insurance companies frequently find themselves in an impasse when defending an insurance claim in court. AOB enables a homeowner to work with a contractor rather than the insurer to handle their claim. Before speaking with the insurance provider, the contractor can then contact an attorney.
According to Florida law, the insurance is required to pay all legal fees in addition to the claim, which the contractor may have exaggerated, if the lawyer’s verdict is even a single dollar more than what the insurer proposed to pay. These costs might amount to thousands of dollars for a claim that was only worth a few hundred dollars in the first place. State Representative Bob Rommel used the example of a case where the lawyer received $756,000 while the homeowner received $35,000.
The state’s AOB system, according to Florida Governor Ron DeSantis, “has really degenerated into a racket.”
The Biggest Pain Point in Florida Is Roofs
Homeowners in Florida who may or may not have true roof damage are aggressively contacted by roofing firms. They have a history of being so aggressive that they have left leaflets on every doorstep in numerous areas while promoting $500 gift cards. As a result of the dire circumstances, Gov. DeSantis signed legislation into effect that prohibits contractors from using “prohibited advertisements” to entice consumers to file insurance claims for roof damage.
A roofing contractor, however, claimed that the rule infringed upon his First Amendment right to free expression, and a federal judge slapped an injunction on the ordinance. The lawsuit, which hasn’t been decided, later attracted additional roofing contractors.
One of the main issues is that insurers reject clients who have asphalt shingle roofs that are older than 10 years in an effort to avoid having to pay for replacement roofs.
Things could get considerably worse given the legal beating the state is receiving. According to a study ordered by the Florida Senate Banking and Insurance Committee, the insurance market in Florida is “spiraling toward collapse.”
New Developments In Florida Homeowner Insurance
New house insurance plans in Florida are no longer being sold by Farmers. Farmers is the 16th-largest home insurer in Florida with a market share of less than 2%. Florida has the fifth-largest house insurance market in the country, but Florida has the 16th-largest home insurers.
Farmers claimed that the choice was made as a result of rising prices related to labor and lumber costs, as well as issues with supply and demand and inventory. The company claimed that this combination is resulting in lower profitability as increased house insurance claim expenses.
The Woodland Hills, California-based insurance provider is the most recent provider of real estate insurance to discontinue offering home insurance or move out of the state entirely. Numerous Floridians have been compelled to look for alternative homeowners’ insurance providers as a result of the unstable insurance market. Citizens Property Insurance, the state’s last-resort insurer, has seen a rise in its customer base to 1.3 million.
For ordinary house insurance coverage in 2023, the last-resort insurer for the state, Citizens Property Insurance, requested an increase in rates of 12.6% on a statewide average. Citizens is requesting permission from the Florida Office of Insurance Regulation to raise average premiums for all of its personal insurance policies, including renters’, homeowners’, and condominium insurance, by 13.1%.
Beginning On November 1, 2023, The Rates Would Increase.
According to Citizens’ president, CEO, and executive director Tim Cerio, the company’s insurance prices are too low and the suggested hikes will assist stabilize the state’s home insurance market. Cerio continues, “Citizens’ existing rates are artificially low, which confuses the private market and hampers competition.
Florida law limits annual rate increases for individual Citizens to 12%, however premiums may increase due to price increases in the labor and construction materials sectors. For non-primary houses, Citizens claims that rates may rise by as much as 50%.
In related Citizens news, the organization is apparently moving 26,000 insurance plans to independent insurance providers. A 2021 Tampa-based insurance firm named Slide will receive 25,000 policies as part of the transfer, and another Florida insurance startup named Loggerhead Reciprocal Interinsurance Exchange would receive 1,000 policies.
Following numerous insurance companies leaving Florida, going out of business, or ceasing to sell policies there, the state’s insurer of last resort saw the number of its policies soar to 1.3 million, prompting the decision.
A requirement of the insurance changes implemented in December is that Citizens policyholders accept private home insurance policies if the premiums are within 20% of Citizens’ costs. One of the laws’ sections was to restrict Citizens’ eligibility in order to lessen the size of the insurer.
The governor of Florida, Ron DeSantis, has signed three legislation into law that would strengthen homeowner protections, boost mitigation discounts, and broaden program eligibility.
What The Three Pieces Of Legislation Will Do Is:
- Ensure that there is already a roof deductible before preventing home insurance firms from imposing additional deductibles on claims.
- Establish a minimum five-year update schedule for property insurance mitigation discounts, and mandate that insurers’ websites clearly describe these savings.
- Set strict guidelines for how home insurance firms must handle claims or risk penalties.
- A clear justification for lowering a loss estimate for an insurance claim must be provided before modifying an insurance adjuster’s report is permitted.
- Allow no bonuses to be paid to officers or directors of failing or bankrupt insurance businesses.
- Administrative penalties for insurance companies should be increased by 250%, or by 500% for infractions involving an emergency.
- require mitigation discounts to be disclosed in a home insurance company’s rate filings, according to the legislation’s proponents.
- Make sure that the firms who provide your house insurance include acceptable discounts, credits, or deductible reductions in their submissions for your home insurance rates.
- expands the list of people who are eligible for the My Safe Florida Home Program, which provides grants to Floridians to assist pay for hurricane retrofitting, which may result in lower home insurance rates.
- The state is making its most recent efforts to address rising house insurance premiums and strengthen industry regulation with these new laws.
In South Florida, the cost of flood insurance is anticipated to soar. A portion of Palm Beach County may require homeowners to pay three times as much for new flood insurance under the National Flood Insurance Program, which is run by the Federal Emergency Management Agency (FEMA).
The rate hikes are related to a new FEMA program dubbed Risk Rating 2.0, which based rates on a property’s risks rather than flood maps. Rainfall, rebuilding expenses, coastal erosion, and the distance of the residence from a water source are some of the factors that FEMA considers.
According to FEMA, the new flood insurance premiums fix a situation wherein policyholders with lower-valued properties paid “more than their share of the risk,” while those with higher-valued homes paid less.
“Because Risk Rating 2.0 takes rebuilding costs into account, FEMA can fairly distribute premiums across all policyholders based on home value and a property’s unique flood risk,” claims FEMA.
Despite the fact that in some areas of South Florida, the price of flood insurance may double or treble, current policyholders won’t likely notice significant premium increases right away. Most of the time, current policies are only allowed to expand by 18% per year.