Florida Home Insurance Premiums Expected To Rise After Busiest Hurricane Season On Record – Florida Insider
The blue plastic tarpaulin temporarily covers roof damage caused by Hurricane Irma in Key West, Florida. Courtesy Shutterstock .– Photo by Chuck Wagner
After dodging most of the hurricanes and storms from the busiest Atlantic storm season, Florida residents could breathe a sigh of relief knowing their property damage could have been far worse that season.
A record of 30 named storms, 12 of which landed in the continental US, crossed the waters of the Atlantic and Gulf at some point during the season. Oddly enough, Florida of all places has been spared from much of the damage known to cause devastating storms.
But like everything else in life, this “happiness” has its price.
Florida residents may soon see their home insurance premiums spike, whether they like it or not. This shows that the season will do damage – in the pockets of residents, even if they were not affected by this year’s storms.
The driving force behind the inevitable surge in property insurance is largely due to two reasons: increased activity at sea and demand for reinsurance from insurance companies.
Yes, homeowners aren’t the only ones looking to be insured in the event of a disaster. Insurance companies can get insurance too, and that is exactly what they do after the storm.
Insurance companies have asked the Florida Office of Insurance Regulation for “increases of more than 30% in the coming year,” according to the Orlando Sentinel. The industry cites rising legal costs as the main catalyst for higher premiums across the state.
While the coast has traditionally been the brunt of a storm due to its proximity to the ocean and bay waters, the entire state is expected to suffer from these elevations.
The combination of increased storm activity, increased litigation costs and corporate demand for reinsurance leads to an increase in premiums, according to Alexis Bakofsky, Director of Communications at OIR.
“Unfortunately, these developments have challenged not only our real estate industry, but also our consumers,” added Bakofsky. “After several years of rate cuts, OIR sees an increase in the proposed average annual premium increases for homeowner prices in Florida.”
Corporations don’t need regulatory approval if they’re raising interest rates by less than 15 percent. However, companies like Capitol Preferred Insurance and First Community Insurance have asked for the average nationwide rates to increase by up to 47 percent at some point this year.
“Rates are rising 20, 30, 40% over the last year and will certainly continue to rise if we don’t do some things in this arena,” Senate President Wilton Simpson, R-Trilby, told reporters after the annual organizing meeting in Tallahassee on November 17th.
Simpson said his board will review and review previously failed bills that aim to limit property insurance lawsuits and disbursement claims to combat premium increases.
Such bills did not make it to Governor DeSantis ‘desk because trial lawyers were vehemently opposed and lawmakers on both sides of the aisle feared the bills would violate homeowners’ right to sue insurance companies that delay or refuse to pay out without explanation.
Insurance companies have long complained about the spike in fraudulent lawsuits and demanding more compensation than the repairs require, but now those requests are getting higher and higher across the state – from the coast to inland.
“It explodes, adding a significant cost to the claims,” said Michael Carlson, president and CEO of the Personal Insurance Federation of Florida. Popular insurance companies like State Farm, Progressive and Farmers Insurance are among its members.
Legislators won’t meet until March 2021, and a new law probably wouldn’t come into effect until July 1. Interest rate cuts would be over a year before homeowners see a lower premium if such a law were passed to encourage them.
Then insurers and regulators would review the 2021 litigation numbers to see if litigation eases before applying for new 2022 tariffs.
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Originally from South Florida, William has professional writing experience at both college and national levels. In his spare time he loves fishing, playing soccer and watching sports and is a fan of all teams in South Florida.