MIAMI – Florida’s property insurance market is in trouble as rising carrier losses and rising premiums threaten the state’s booming real estate market, according to insurance managers and industry analysts.
Longtime homeowners face double digit rate increases or notice that their policies are not being renewed. Out of state home buyers who moved to Florida during the pandemic are experiencing sticker shock. Insurers swimming in red ink are reducing coverage in certain geographic areas to support their finances.
Various factors play a role, say insurance managers and analysts. Two hurricanes that devastated the state – Irma in 2017 and Michael in 2018 – caused claims at an estimated cost of about $ 30 billion. The cost of reinsurance that insurers take out to cover some of the risk of the policies they sell is increasing. Of particular concern, executives say, is excessive litigation over insurance claims and an increase in what insurers are viewing as bogus claims.
A large group of Florida homeowner insurers caught in Marsh McLennan’s Guy Carpenter business had underwriting losses of $ 1.58 billion in 2020, more than double the losses of $ 664 million. USD in 2019.
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