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- Florida homeowners insurers are significantly raising their prices and denying policy renewals.
- causes for rising rates include weather-related risk and increased frequency of claims in the region.
- Savings opportunities, like wind mitigation discounts, can lower your home insurance costs.
The insurance market has become increasingly volatile in the United States in the recent past, resulting in inflated premiums across all insurance products.
In recent years, natural disasters and political unrest have dampened risk appetite among providers across the United States, leading to higher rates, says Ken Gregg, CEO of Orion180, a Homeowners insurance provider serving independent agents in the southeastern United States.
Florida, in particular, is experiencing some of the highest homeowners insurance rate increases and the largest number of non-renewed policies in the nation. According to S&P Global Market Intelligence data, as of mid-April, the Florida residential insurance market will see approximately 37,000 policies cancel.
why is florida home insurance going up?
florida is experiencing the worst homeowners insurance crisis in the united states. According to S&P Global Market Intelligence data, by the end of 2021, Florida residential insurance providers experienced a $1 billion loss in net income. Many providers are leaving the state, and larger insurers like Geico and Progressive are canceling policies among homeowners in the region. Gregg cites a few reasons for this: upcoming weather-related risks, insurance scams, and frivolous lawsuits.
Florida is home to regular flooding and hurricane disasters. Insurers are bracing for sizable water, wind and flood damage claims and, as a result, lost profitability. Hurricane season in Florida begins June 1, according to the Florida Division of Emergency Management.
Another reason Florida homeowners are seeing an increase in their premiums is due to insurance scams. Gregg says the rise in claims is “driven by ‘bad faith actors’ in the contracting and litigation markets.”
A major scam involves bad faith roofing contracts. contractors ask you, the homeowner, to pay for a new roof with your insurance, claiming they can reimburse you for your deductible. the scammer will ask you to sign an agreement that allows you to file a claim with your insurance provider. An adjuster will then visit your property to inspect the “damage” (the reason the claim was made), and finding little or no damage, your insurance company will refuse to provide compensation. the dishonest housing contractor will then sue their provider for underpayment and the insurer will have to take legal action or settle out of court.
gregg explains that the roof is not free for two reasons. One, his premiums will go up because he filed a claim for a new roof. and two, everyone who buys insurance will actually have to pay for that new roof as well. As a result, the added cost of premiums increases for policyholders. Due to a growing number of insurance scams and property lawsuits in Florida, insurers are experiencing huge losses in net income.
how much does homeowners insurance cost in florida?
In 2019, the average homeowners insurance premium was $1,989 in the United States, according to the Insurance Information Institute. The average cost of premiums in Florida in 2022 is $3,585, roughly a 55% rate increase over the past three years, according to Insurify.
Of course, homeowners across the country are experiencing increased premiums, but not as much as in Florida. florida premiums are $2,187 more than the national average. Below are rates for some of the cheapest homeowners insurance options in Florida:
5 ways to lower the cost of your homeowners insurance
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While insurance rates are rising everywhere, there are several ways Floridians can lower their homeowners insurance costs and avoid policy denials.
Shop and compare quotes annually to see if you can get a better deal elsewhere for the same level of coverage. Please note that some insurers may charge you an early termination fee.
look for discounts
Get savings on your insurance premiums by bundling multiple products, like your auto and home insurance policies. discounts can also lower your premiums. insurance providers often list the discounts they offer on their websites. Contact your insurance agent to see if you qualify for lesser-known discount opportunities.
raise your deductible
Increasing your deductible from $500 to $1,000 could save you up to 25% on your insurance bill, according to the Insurance Information Institute. Please note that deductibles may be subtracted from the total amount of your coverage.
routinely maintain your home
Claims can significantly increase your premiums and even be grounds for denial. doing your due diligence making sure your systems are working properly and identifying early signs of foundation problems will lessen the chance of significant damage.
fortify your home against wind damage
Strengthening your home’s frame and roof against wind-related damage may qualify you for wind mitigation discounts, Gregg says. Doing so is especially important in Florida, where hurricanes are frequent and damaging.