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Insurance Rates Florida

Florida Residents Are Facing a Significant Rise in Insurance Rates

Aug 20, 2023

Living in Florida and basking in the warmth of the sun on a beautiful beach is a goal for people in the USA and from other parts of the world. Unfortunately, the high cost of insurance coverage for vehicle and home insurance makes keeping this dream alive difficult for many people.

In recent reports, homeowners in the Sunshine State are paying more than four times the national average insurance rates. In other parts of the country, the average home insurance cost is $1,700 per year, with residents in Florida paying $6,000.

The Weather Factor

Florida is one of the states with a high risk for natural disasters. With hurricane season lasting from June 1st to November 30th, insurance companies have a significant window of possible payouts, and with storms on the increase for both frequency and intensity, the risk continues to grow.

Hurricane Ian, which hit the coast of Florida in 2022, resulted in almost $113 billion in damage. This was the third most costly hurricane in the USA, with only Katrina and Harvey resulting in more damage. In addition to Ian, hurricanes Michael, Irma, Wilma, and Dennis, all at least Category 3 storms, have hit the state since July 2005.

While the weather is a significant factor, it is not the only factor contributing to increased rates charged by insurance companies. Unfortunately, like the weather, changing these issues is not a simple process.

Litigation Abuse

Homeowners’ insurance lawsuits in the state make up 79% of all total homeowners’ lawsuits filed in the country. Programs have been in place throughout the state for years to shield the policy owner from paying legal fees, even if they lost the case. This left the insurance companies paying for all legal fees, adding to the cost of the process and increasing insurance rates as this cost was passed on to the homeowners.

This policy ended on January 1st, 2023, but before the regulation went into effect, over 300,000 lawsuits were filed that will be heard under the prior process.

Additionally, the assignment of benefits or AOB policies allowed the homeowner to sign over claims to contractors who completed unauthorized or necessary work and then attempted to bill the insurance companies. When these claims were denied, the contractors filed lawsuits against the insurance company, further adding to litigation costs.

Reinsurance

Most of the insurance coverage providers in the state are smaller regional companies. They use reinsurance, which is purchasing coverage from another insurance company in the event of large payouts. As storms and damages increase, the cost of this reinsurance rises, and it changes based on the renewal time. In January of 2023, some insurance companies faced a reinsurance increase of 100%, further driving up insurance rates.

These factors, and others, contribute to the rising cost of insurance rates in Florida. If you live in the Hialeah Gardens, Margate, Homestead, Palmetto Bay, Cutler Bay, Hialeah Gardens, North Miami Beach, Coral Gables, Hialeah, Naples, and Miami, FL, areas, Del Toro Insurance is here to help.

For more information on how to possibly reduce the cost of insurance coverage for your home, call us today at (305) 335-8676. You can also reach us online for answers to your insurance questions.

FAQs

 

How do the recent changes in weather patterns affect insurance rates in Florida?

Increased storm intensity and frequency result in a greater number of claims, which increases insurance rates throughout the state.

Are there any steps Florida residents can take to mitigate the impact of rising insurance rates?

Completing a wind mitigation inspection and making recommended improvements to the roof of the home, adding hurricane-proof doors and storm shutters can help reduce rate increases.

How can Florida residents assess whether their current insurance coverage is still suitable given the rising rates?

Talk to an insurance agent at Del Toro Insurance to review your current coverage and explore options to reduce your insurance costs.

Are there any alternative insurance options available for Florida residents facing high rates?

Homeowners in Florida may qualify for Citizens Insurance, which is a not-for-profit insurance provider. Shopping for other insurance companies in the state may also provide lower rates than your current provider.

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