Living in Florida comes with incredible perks. You can take your family to the beach regularly, enjoy professional spring training not far from home, and visit any of the various amusement parks the state has to offer. But, just like any other region, we have our own tradeoffs to accept. One of the downsides to living in Florida is having to constantly be mindful of the natural disasters that can plague our area. Having homeowner's insurance for hurricane damage and flooding is a common necessity for us all, but what happens when those insurance rates increase exponentially? Insurance experts estimate that home insurance rates are actually about to increase on an average of 30-40% for the upcoming year, and the impact will be a hard blow to many Florida residents.
Why Are Florida Home Insurance Rates Going Up?
Rates are going up for many reasons: horrible weather, fraud, reinsurance costs, and problematic contractors. Over the past few years, Florida has had a major increase in storm activity and subsequent damage. Hurricane Irma in 2017 and Hurricane Michael in 2018 left major parts of the state in shambles as it struggled to repair all that had been affected or destroyed. The increase of storms and floods led to an increase in insurance claims from homeowners. This year was no exception with a total of 30 named storms and 12 that made landfall this hurricane season. Usually, insurers can stay ahead with meeting claims, but when major disasters happen back to back, it becomes difficult for the insurance companies to continuously provide financial relief. To be able to do so, insurers have to purchase reinsurance, which is basically money the companies will use to then provide relief for existing insurance policies.
Which Florida Insurance Companies Are Increasing Their Rates?
To make ends meet, some insurance companies are taking drastic measures. If an insurance company wants to increase their rate by less than 15%, they can do so without asking permission. But, anything over that amount has to be approved by the Florida Office of Insurance Regulation. Many companies are increasing their rates anywhere between 20-40% for this upcoming year. In fact, some experts expect rates to go up another 30% the following year before they begin to decrease because it usually takes about 18 months for policy owners to see any changes made to their plans if the law steps in to make those changes. Both Capitol Preferred Insurance and First Community Insurance requested a 47% increase earlier this year. However, rate increases are not the only move for every company. Some companies, like People's Trust Insurance, have stopped doing any new sales until they can get things under control. Other companies are moving forward with new policies that include tighter restrictions.
Is This Increase The Worst It Has Ever Been?
While the projected overall increase is drastic, this is not the first time Florida has seen something like this. Homeowners dealt with similar pricing as recently as 2006 and then earlier in 1993, and both situations were repercussions of an unusual increase of storm activity and damage claims.
Will Lawmakers Step In To Stop the Rates From Rising?
Florida lawmakers are already discussing the issue of home insurance rates rising, and some hope to adopt reforms during the legislative session that begins in March of next year. Some of the issues expected to be discussed include, but are not limited to, long deadlines to file claims and abuse of coverage.
What If I Cannot Afford the Rate Increase for My Policy?
If you get a notice regarding a rate increase, take a second to consider all of your options before you renew the policy. One thing you can do is shop around for a better policy. Chances are slim that a new policy would be better than a renewal of your current one because of the state nearly everyone is in with this issue. But, it never hurts to check first, and you may very well find a pleasant surprise. Another thing you can do is agree to changes to your policy. You could agree to reduced coverage where you accept insurance for the repair of something like a roof instead of demanding a complete replacement. You could also agree to shorter deadlines for filing claims. Another option is to consider using the state-run Citizens Insurance if all of the other policy rates are simply beyond your means.
Contact Us Today
Dealing with home insurance claims and denials can be overwhelming, especially at the end of the year. To make sure you are not wasting your time or efforts, contact us today at Keller Melchiorre & Walsh. Our experience in home insurance denial is to your benefit, and we are ready to share our expertise with you. Give us a call today so that we can help you create a plan that will save your family time, money, and unnecessary stress in the long run.