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May, 3 2024

Home Insurance Florida

Understanding the Exodus: Why Home Insurance Companies Are Leaving Florida

Aug 11, 2023

Homeowners and home buyers in Florida are facing a new challenge that is only going to become more significant in the future. This challenge is finding affordable home insurance due to the increasing number and severity of hurricanes hitting the state.

The team at Del Toro Insurance is here to help with your insurance needs. We discuss the types of insurance required, including homeowners, flood, and hurricane insurance based on your home and location.

Insurance Prices

According to an article in The Palm Beach Post on July 18, 2023, “Over 100,000 Floridians are scrambling for homeowners’ insurance after a wave of insurers have stopped writing policies in the disaster-prone state.” In July 2023, Farmers Insurance became the fourth major insurance company to leave the state, with an additional fourteen smaller insurance companies now in liquidation.

Existing homeowners may have coverage, but some are facing increases in homeowners’ insurance coverage by up to 42%. For many homeowners, this dramatic increase in insurance is unaffordable and makes it difficult to remain in their homes. While selling may be an option, the difficulty for buyers finding affordable home insurance creates a new problem, extending the time on the market and making it difficult for anxious sellers to get out of their homes.

The Reasons

There are multiple reasons for insurance companies to pull out of Florida. One factor is the rapid increase in population. Starting in 2021, Florida has experienced a significant population boom and is now the fastest-growing state in the country. This has created a demand for property at the same time as insurance coverage becomes more difficult to obtain.

Climate change is not new and increases in the number of claims due to the larger population and increased frequency and severity of storms have been a factor for decades. The last few years have seen a significant spike in these intense, damaging storms and hurricanes, resulting in increased payouts from insurance providers, making the state high-risk area for insurance companies. An April 2023 study by the Pacific Northwest National Laboratory reported a projection of “enhanced hurricane frequency for the Gulf and lower East coast regions,” which may be as high as one-third more named events per year in this area.

There is one more reason that Florida homeowners’ insurance is on the rise. This is directly related to the number of lawsuits filed against insurance companies by homeowners. Florida homeowners make up 79% of all lawsuits in the country, largely stemming from fraudulent schemes for replacing damaged roofs after hurricanes and damaging storms. The Florida Supreme Court also approved a decision to increase attorney fees in these cases, further costing the insurance companies.

The Solution

Del Toro Insurance works with homeowners throughout Florida to ensure affordable home insurance. We serve clients throughout Hialeah Gardens, Margate, Homestead, Palmetto Bay, Cutler Bay, Hialeah Gardens, North Miami Beach, Coral Gables, Hialeah, Naples, and Miami, FL.

Maintaining the right type and level of insurance is essential to protect your home, which is typically your most valuable asset. Call us today at (305) 335-8676 or reach us online to discuss your insurance needs.

FAQs

 

Why are home insurance companies leaving Florida?

The combination of increased storm damage, frequency of storms, expanding population and increased lawsuits against insurance companies are creating high risk levels that insurance companies are not willing to assume. Rather than continue to insure properties in the state, they are leaving.

How does the exodus of home insurance companies affect homeowners in Florida?

Homeowners are facing dramatic increases in homeowners insurance rates, with some people seeing up to a 42% increase over last year. At the same time, there are fewer insurance companies in the market, making it difficult for potential new home buyers to obtain the necessary insurance coverage.

What steps are being taken by the state government to address the issue of home insurance companies leaving Florida?

Currently, little is being done by the state government to help homeowners, according to many people impacted by the change. However, the government did provide over $3 billion last year to help provide industry stability. The state does have the not-for-profit Citizens Property Insurance Corporation, which may be helpful for qualifying homeowners.

How are homeowners in Florida coping with the challenges of finding adequate home insurance coverage?

Homeowners are shopping for the best insurance coverage, which may include determining if they meet the criteria for coverage through Citizens Property Insurance Corporation.

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