Homeowners in Florida have been facing skyrocketing insurance rates for years. Although legislative efforts have been taken to help avert a total collapse of the insurance industry, including passing Senate Bill 76 and Senate Bill 2-A in 2022, Florida is still an expensive state to insure property.
Below, we’ll explore reasons behind the high insurance rates in Florida and what homeowners can do to find some relief.
Reasons for Rising Insurance Rates
Florida homeowners pay some of the highest insurance premiums in the country, and several factors contribute to these soaring costs, including:
- Frequent and severe weather events – Florida is no stranger to hurricanes, tropical storms, and other extreme weather events. These natural disasters can result in substantial property damage, and insurers bear the financial burden of paying claims for storm-related damage. As the frequency and intensity of storms increase, insurers have raised premiums to account for the rising risks.
- Reinsurance costs – To oversimplify: across the United States, most property insurers collect premiums and then keep a reserve fund to pay out claims. Their profit is the difference between those premiums and paid cliams. To protect themselves from massive payouts, they purchase reinsurance (insurance for insurance companies). Florida insurers rely heavily on reinsurance because of the state’s exposure to catastrophic losses from hurricanes and other severe weather. As the cost of reinsurance has increased in recent years, those costs have been passed down to consumers.
- Insurance fraud – Insurance fraud has become a significant issue in Florida. Namely, some contractors were filing fraudulent or inflated claims on behalf of their clients for property damage. Recent legislative reforms, including the Assignment of Benefits Reform, have aimed to reduce fraudulent claims.
What Homeowners Can Do to Manage Rising Rates
While individual homeowners won’t have much direct impact on market rates, there are some steps they can take to manage their own costs. Here’s what you can do:
- Shop around – It’s always a good idea to compare quotes from multiple insurers to ensure you’re getting the best possible rate for your coverage needs. Schedule a meeting with your insurance agent twice a year to get quotes, go over policies to see what’s available, and see what level of insurance is right for you.
- Stay on top of home maintenance – Shoring up your home’s defenses against storms, such as by installing impact glass or upgrading your roof, may qualify you for discounts on your insurance premiums. Moreover, staying on top of property inspections and maintenance may reduce your need to file a property damage claim.
- Raise your deductible – Another strategy to consider is opting for a higher deductible, which can lower your premium. However, you’ll need to be prepared to pay more out of pocket if you do file a claim.
Contact Our Law Firm at Kandell, Kandell & Petrie
At KK&P Law Firm, we help Floridians navigate the complexities of insurance claims and protect their rights. If you’re dealing with a property damage claim or have questions about coverage on your Florida home, don’t hesitate to contact our Miami office for a consultation. We have been helping homeowners with their hurricane and other property damage claims since 2004 and have more than 50 years of combined legal experience.
