Why Did My Homeowners Insurance in Florida Go Up So Much?

If you are a homeowner in Florida, you have probably noticed recent increases in your home insurance premium. As we addressed in a previous newsletter, the home insurance premiums in Florida are seeing significant upward pressure. In fact, in recent history the Office Of Insurance Regulation has been seeing a lot of requests for and approving many rate increases. In our office, 15%-25% is not uncommon and some increases are over 50%, year over year.

While this can be a distressing situation, we want to remind you that we are an independent insurance agency, which means we can offer multiple insurance companies, not just one. Sometimes moving coverage to a new company can make sense. There are, however, other factors involved that should be considered as well. Sometimes making changes within the current policy or even making no changes at all, can be the best course of action. You do not want to unknowingly give up coverage you would prefer to keep. A good agent can help you make informed decisions in the face of the current market conditions. If you have questions about your policy, your agent can help you evaluate options based on your preference and risk tolerance in the face of the current market pressures.

What is causing the increases of home insurance premiums?

• Increased Litigation and Litigation Related Costs

Florida has seen a very substantial increase in the number of lawsuits filed related to home insurance claims. A Google search will provide various articles and reference to litigation trends. Between attorney fee multipliers and the shear increase in number of lawsuits, the litigation burden is playing a role in driving up premiums. In many cases, law firms are being rewarded substantially more than the homeowners themselves.

• Fraud

Florida has regularly been in the news for fraudulent claims and some dishonest contractors. While this certainly is the exception and not the norm, the cost of paying claims that are fraudulent costs the insurance industry substantially and affects premiums.

• Inflated repair costs

The costs to repair homes in areas badly damaged by major weather events can lead to “loose” claims handling. Because there are so many claims to process, it is easy for claims to be submitted with inflated repair costs. While this also falls into the category of insurance fraud it continues to happen with increased regularity.

• Increased frequency of weather-related claims

In recent history, severe weather in South Florida has contributed as well. The damages from hurricanes Irma and Michael were extensive. With an increased frequency of severe weather-related claims, the insurance companies will need to cover their costs to remain profitable. Without profitable insurance companies in Florida, the health of the home insurance market and options for consumers could be at risk.

• Construction Materials

COVID and demand for building materials has caused building materials costs to increase dramatically.   Increased demand for and cost of building materials makes repairing damaged homes more costly. For example, over the past year, lumber prices have increased dramatically. The higher the cost of repair paid out from covered losses, the more premium insurance companies will need to pay these claims and remain operable.

What can you do to lower your home insurance premiums in Florida?

You do have options for lowering your home insurance premiums in Florida. As stated above, a good agent can help you walk through these options in terms of premium reduction impact but also by helping you understand how the changes could affect potential claim scenarios. Here are a few possible ways you could lower your premium for home insurance in Florida:

1. You could raise your deductible, which increases the amount of the damage which you are responsible for.
2. Review optional coverages in your policy and adjust or remove any you don’t wish to maintain
3. There are a few companies (though not as many as some other states) that offer a multiple policy of bundling discount if your home and auto are with the same company
4. Review alternative companies – as listed above it is important to consider all the factors when considering this possible option, not just the premium.
5. Updates to the home: depending on the homes age, you may have installed a new roof since the policy was written, or installed impact glass/shutters, replumbed the home (for older homes) or added a monitored alarm system. All of these things can expand options/potentially reduce premium.

While home insurance can be stressful, we want you to know that you can reach out to us for options. We represent many well-rated insurance companies in Florida and can review what you’re paying today and look for ways to lower your premiums in the future, all while ensuring you are satisfied with the coverage scenario and your deductibles/exposure.

The above description provides a brief overview of the terms and phrases used within the insurance industry. These definitions are not applicable in all states or for all insurance and financial products. This is not an insurance contract. Other terms, conditions and exclusions apply. Please read your official policy for full details about coverages. These definitions do not alter or modify the terms of any insurance contract. If there is any conflict between these definitions and the provisions of the applicable insurance policy, the terms of the policy control.