Homeowners in Florida are still frustrated with the exorbitant property insurance premiums, despite the state’s efforts to stabilize the market. The affected residents have shared their distressing experiences with Newsweek.
Many Florida homeowners are currently facing a difficult situation due to the soaring insurance premiums. In recent years, several private insurers have either reduced coverage in the state’s most vulnerable areas or completely pulled out, citing the heightened risk associated with the more frequent and severe weather events.
According to an email sent to Newsweek by Chris M., many individuals are experiencing financial strain due to the expensive cost of insurance. “People are hurting,” Chris wrote. “No one wants to bear the burden of such high insurance costs. As someone who lives on a fixed income, I am unable to sell my house or refinance. If the situation does not improve, I may have to resort to extreme measures.”
According to Fort Myers’ WINK News, Jennifer Fehrs, a homeowner, expressed her concern regarding the uncontrollable and unprecedented surge in property prices. She stated, “It’s out of control. It’s completely off the charts.” Another resident, Seth Ford., also based in Fort Myers, stated that the surge in prices had occurred immediately after Hurricane Ian in 2023 and had not gone down since then. “It’s gone up and hasn’t gone back down. That’s for sure,” he said.
Florida’s property insurance sector is facing a perfect storm, with various factors contributing to the growing risk. Climate change is one of the significant factors adding to this risk.
According to Martin D. Weiss, the founder of the rating agency Weiss Ratings, the Florida homeowner’s insurance market has faced a unique set of challenges over the past twenty years. He explains that a combination of natural disasters, financial crises, and regulatory issues have made the situation in Florida different from what is seen in other states. This was revealed in an interview with Newsweek.
“He said that the U.S. has the highest failure rate, larger national companies are departing, and there is a regulatory environment that is contributing to the rising levels of storm damage. In addition, the insurance company rating system is severely biased, which is obscuring the weaknesses in the industry,” he explained.
According to Ann S., a Michigan resident who owns a mobile home in Sarasota County, Florida, the insurance situation in the state is nothing short of a nightmare. Many people are reportedly leaving the state due to the exorbitant insurance rates. Ann recounted how her Michigan neighbors owning a second home in Florida on Pine Island had to sell the house and leave the state after their insurance premiums skyrocketed to over $18,000 for one year following Hurricane Ian.
According to her, the mobile home her family owns, which was manufactured in 1994, is currently insured by Citizens, Florida’s insurer of last resort. Although the unit has undergone a complete renovation, no other insurer is willing to acknowledge this fact.
As non-Florida residents, we were hit with a 40 percent surcharge by Citizens for our policy this year. The insurance on our park model in Florida now costs us an additional $1,000 compared to the insurance we pay for our two houses in Michigan, which are insured for five times the amount of our park model.
Experts initially believed that the Florida homeowner insurance crisis was more widespread than it may actually be.
In 2023, Florida homeowners paid an average statewide premium of $3,340, according to a revised estimate by the Insurance Information Institute (Triple-I). This is a significant decrease from the previous estimate, which had placed the average annual premium at $6,000, the highest in the country.
Mark Friedlander, director of Triple-I, informed that the noteworthy discrepancy was a result of the constructive effects of legislative reforms that tackled the widespread exploitation and deceitful claims in the legal system, which caused a risk crisis in the state. Friedlander mentioned that these reforms were unforeseen during Triple-I’s estimation of premiums.
Florida has recently given the green light to eight new insurance companies to operate within the state. This move is expected to relieve the pressure on Citizens and provide more choices for homeowners in Florida.
Florida still has high insurance premiums even after Triple-I revises 2023. Bankrate data reveals that the average cost of homeowners insurance in the state is currently $5,533 per year with a $300,000 dwelling coverage policy as of July. This amount is significantly higher compared to the national average premium of $2,230 per year for the same coverage, which is about 148 percent more.
Do you reside in Florida and finding it challenging to cope up with the increasing property insurance rates? If yes, then don’t hesitate to reach out to [email protected] and share your story. Your experience can help shed light on this issue affecting many Florida homeowners.