ORLANDO, Fla. – Sharon Landry says she “freaked out” when she opened her statement and saw the premium for her homeowner’s insurance policy increase.
Her policy increased from $ 1,318 to $ 2,153 per year, an increase of more than 60%.
“It kind of panics you,” Landry said.
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Landry says she has been in her Ocala home for 17 years, with only minor gains and only one minor claim that was made years ago.
“I don’t think insurance companies should be able to do that,” Landry said. “It’s just wrong. I mean, people are struggling to stay in their homes. “
Landry is by no means alone.
News 6 dug a bit and found that from January to September 2020, dozens of property insurance companies requested rate increases from the state, according to court records.
Florida’s Office of Insurance Regulation approved nearly 100 rate increases involving dozens of insurers.
Many of the rate hikes are in double digits.
No one from Florida’s OIR would be on camera, but spokeswoman Karen Roach wrote in an email, “Florida’s insurance market is one of the most complex in the world.”
“The real estate market is facing major challenges as the frequency of claims increases and these claims for damages become more expensive,” she continued in an email.
According to the email, the challenges are mainly due to increased litigation, higher losses in catastrophe claims as a result of several hurricanes in recent years and rising reinsurance costs.
Reinsurance is insurance that one insurance company takes out with another insurance company to protect itself against the risk of a major loss.
The insurance industry blames the 2017 and 2018 storm seasons.
Hurricanes Irma and Michael caused $ 20 billion in damage.
Paul Handerhan is with FAIR, the Federal Association for Insurance Reform, a non-profit organization that helps consumers at affordable prices.
“Florida is really in crisis,” said Handerhan. “Florida insurers are definitely in a tough financial position right now.”
He says insurers will take a hit even if interest rates hike.
“The vast majority of insurers buying homeowners insurance in the state of Florida have posted underwriting losses over the past five years,” he said.
Handerhan said a mountain of lawsuits brought by contractors against insurance companies are driving up prices.
Some companies and contractors canvass and patrol after storms, going door-to-door suggesting homeowners could be harmed and should file a lawsuit, according to Handerhan.
If the insurance company doesn’t pay the claim, the homeowner can sue, Handerhan said.
Often times, insurers pay the claim to avoid the cost of litigation, which can be much more expensive, he said.
“All consumers, me you and everyone else, we pay for the activities of these roofers and other people who go around asking for advertisements,” Handerhan said.
Landry did what all consumers should do.
She went shopping and found another company with the same coverage for an extra $ 100 a year. She had to pay an additional $ 100 for the wind abatement, but it was still a lot less than the $ 800, plus her previous company raised her premium.
“People are currently struggling most of what they have ever struggled in this country in years,” Landry said, speaking of the pandemic. “This is not the time for insurance companies to take advantage of these people.”
Historically, the larger rate increases have been on the coast, but we are seeing that some areas are seeing large increases for the first time.
Citizen insurance is run by the state and is where people go when they can’t get insurance anywhere else.
Since 2015, Citizens has doubled the number of policies in Orange, Seminole, Osceola, and Lake counties.
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