Florida residents have been lamenting the increase in property insurance costs in the area. They have been receiving bills with double the premium costs of what they usually pay. Sharon Landry, who has been in her Ocala home for 17 years, said it shouldn’t be legal for insurance companies to hike rates. “People right now are struggling the most that they’ve ever struggled in this country for years. Now is not the time for the insurance companies to be taking advantage of these people.”
Since 2016 Florida’s insurance rates have increased by 31.5% due to the high number of natural disasters in the area. In December 2020, the Florida Office of Insurance Regulation approved Edison Insurance Co. 21.9% average increase for new policies that went into effect on February 15 and March 24 for renewals.
According to the Herald Tribune, companies like Southern Fidelity and Capitol Preferred got their rate increase requests approved. Director of Communications in FOIR, Alex Bakofsky, had this to say about the insurance industry’s high premium costs. “These challenges are largely due to increased litigation, exacerbated by higher catastrophe claim losses as a result of multiple hurricanes over the past several years and rising reinsurance costs as a result of a hardening reinsurance market.” Recent hurricane events have resulted in rising roofing insurance claims statewide.
Insurance companies have blamed the hike in prices on the never-ending hurricane roof claims they have to pay. One of the most extensive claims came from Hurricane Irma in 2018, which insured losses of up to $17.44 billion. Other providers are increasing premiums based on the age of the houses. Properties older than ten years tend to cost more to properly repair.
Michael Carlson, CEO of Personal Insurance Federation of Florida, said the costs discourage other private insurance providers from Florida. He said, “It’s a really unfortunate rate payers are paying, and even worse is folks are being nonrenewed, and in parts of the state, notably along I-4, there are ZIP code areas where insurance companies are refusing to write new business on the property area because the cost of claims and related litigation in those parts of the state are so dramatic that the insurers don’t believe they can actually do business in these areas.”
With this rising trend, Florida lawmakers have opted for legislation to save the insurance market. The proposed bill, if passed, might see a halt to high premium rates. It proposes that Florida homeowners would only have two years to file claims after a hurricane. Before, clients had 3-5 years to file insurance claims. It also places a limit on lawsuits and a reduction in lawyer incentives who litigate property insurance cases.
Getting insurance providers to pay homeowner’s legitimate claims would be difficult. Instead, they would be allowed only to pay a percentage of the coverage fees for repairs by construction. Floridians who find the new rates to be too high have been advised to shop for cheaper providers. State-run insurance company Citizens Property Insurance has become many people’s last resort. However, to reduce its rapid growth, there will be an increase in rates from 2022 and every year after.