Statewide Insurance continually strives to provide you with access to top rated insurance companies and the most up to date insurance industry information. We are constantly monitoring the Florida insurance market for new options for our clients. Our goal is to always keep you informed of how the Florida insurance market may impact you, your family, or your business. The industry information we receive is collected through our memberships in professional insurance associations, partnerships with top insurance companies, as well as monitoring what our Florida legislators are doing in Tallahassee.
You may have already seen or heard about the difficulties the Florida insurance market is facing. Homeowners insurance is becoming increasingly expensive and many companies have gone out of business or stopped writing any new insurance policies in Florida. We’ve seen increases in the market from 30% to over 200%, just in the last 12 months. Companies have tightened their underwriting guidelines, making it more difficult than ever to get an insurance policy issued and keep it in force. Homeowners insurance is not the only affected market. The automobile insurance market is taking larger than normal rate increases this year and commercial property insurance companies have taken unprecedented rate hikes.
Why is this happening?
Excessive litigation is a major factor in the cost of insurance. According to the Office of Insurance Regulation, Florida makes up 9% of homeowners insurance claims nationwide, but we account for 79% of lawsuits nationwide. We’ve also seen rampant fraud throughout our state. ABC Action News recently reported on the fraudulent roof claims contractors have filed over the past 2 years.
These issues are exacerbated by rising inflation, supply chain shortages, and labor shortages, only adding to the already increased cost of claims being reported in Florida. The insurance companies are required to show state regulators how much they pay out in claims in order to apply for rate increases. What they pay out in the preceding years, affects what everyone will pay the following years. This year it is all catching up to carriers and consumers, especially since hurricane Ian made landfall in South Florida.
What can be done about it?
To address this crisis, Gov. Desantis has called for 2 special legislative sessions in 2022 alone. One was a special legislative session in May of last year to address litigation and *reinsurance. More recently, a special session in December of last year also attempted to address *reinsurance and fraud. (*Florida CFO: Reinsurance is insurance purchased by insurance companies. Reinsurance rates are expected to increase at least 50%. To cover the increased cost, insurance companies pass on those expenses to policyholders in the form of premium increases. The Legislature is hopeful that lower reinsurance rates offered through the Florida Optional Reinsurance Assistance program will decrease the need for insurance companies to increase premiums)
We are optimistic and do expect to see improvements in the coming years. BUT we are hearing that these impacts will not be immediate. This is because legislation changes can take a year or two for companies to implement, work out any kinks, and provide any direct impact to consumers.
So, what are my options?
Reshop your insurance. Just keep these factors in mind;
- other companies have already taken rate increases or they will be in the near future.
- companies are making it more difficult to qualify for insurance.
- companies are scrutinizing each home more during their “90 days” underwriting process
- we’ve seen companies cancel policies, after it has been issued, for minor reasons found during their “90 days” underwriting review
- some companies are issuing policies that have reductions in coverage, roof exclusions, and water damage exclusions
If you want to stay with your current company and are looking for ways to save on premium costs, we will be happy to review your current coverage and deductible options with you.
As always, our political representatives hold the most power to change the industry. You may also use this link: https://www.usa.gov/elected-officials to reach out to your legislators and let them know the impact this is having on all of us.