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Florida's Wobbly Insurance Market: Why Companies Are Leaving and What You Can Do

Florida's Wobbly Insurance Market: Why Companies Are Leaving and What You Can Do

Florida's sunny beaches and vibrant lifestyle are a magnet for many, but securing reliable and affordable home insurance can feel like navigating a hurricane itself. In recent years, a perfect storm of factors has caused many insurance companies to either raise rates dramatically, limit their offerings, or even abandon the state altogether. This leaves Florida homeowners scrambling for coverage and facing the harsh reality of a stressed insurance market.

Since 2017, 11 insurance companies that offered homeowners insurance have liquidated (filed bankruptcy). And other companies are leaving the state.  For Florida homeowners, this results in fewer home companies and increased premiums.

Understanding the Exodus: A Multi-Faceted Problem

  • Lawsuit Abuse: Unlike most other states, Florida experiences a disproportionate number of lawsuits filed against insurance companies relative to the number of claims submitted. This litigation culture drives up costs for insurers, as they must factor in significant legal fees when setting premiums.
  • The Fraud Factor: Unfortunately, Florida also grapples with a higher-than-average rate of fraudulent insurance claims. From questionable roof damage claims to inflated repair costs, these deceptive practices chip away at the financial stability of insurance companies.
  • Hurricane Havoc: Florida's location makes it a bullseye for hurricanes. The constant threat of these destructive storms translates into high payouts for insurers following major weather events. This high-risk environment discourages some companies from offering coverage in the state or forces them to charge exorbitant premiums.

The Ripple Effect on Homeowners

The consequences of this insurance exodus are hitting Florida residents hard. Here's what you can expect:

  • Skyrocketing Rates: As insurance companies try to recoup their losses, premiums will likely continue their upward trajectory. This can put a significant strain on household budgets, making it difficult for some homeowners to afford essential coverage.
  • Limited Choices: With fewer companies offering home insurance in Florida, the selection of policies available to homeowners shrinks. This lack of competition can leave them with fewer options and potentially less leverage when negotiating terms.
  • Citizens as a Last Resort: The Florida state-run insurer, Citizens Property Insurance Corporation, might become the only option for some homeowners who can't find coverage elsewhere. However, Citizens often come with limited coverage options and the real possibility of another company taking the policy over through the depopulation process at a rate of up to 20% than the Citizens’ rate.

Navigating the Storm: Tips for Finding Coverage

Despite the challenges, securing home insurance in Florida is still possible. Here are some strategies that can help you find the right coverage in this turbulent market:

  • Embrace the Independent Agent: An independent insurance agent acts as your advocate, shopping around and comparing policies from multiple companies. This can save you time and effort, while also ensuring you get the best possible coverage for your needs.
  • The Deductible Dance: Raising your deductible is a classic way to lower your premium. However, it's crucial to choose an amount you can comfortably pay out-of-pocket in the event of a claim.
  • Be Vigilant Against Fraud: As a homeowner, you play a vital role in maintaining a healthy insurance environment. Be wary of unsolicited repair companies and report any suspected fraud to your insurer. Filing claims only for legitimate needs helps to keep everyone's premiums down.

A Glimpse of Hope on the Horizon

While the current state of Florida's insurance market is concerning, there are reasons for cautious optimism. Recent legislative reforms aim to address lawsuit abuse and deter fraudulent claims. While it might take some time for these changes to have a significant impact, they represent a step in the right direction. Additionally, new insurance companies are cautiously entering the Florida market, offering some hope for increased competition and potentially lower rates in the future.

Augustyniak Insurance: Your Partner in a Stormy Market

At Augustyniak Insurance, we understand the anxieties Florida homeowners face when it comes to securing reliable insurance. As a trusted independent agent, we're committed to navigating this complex market for you. Our dedicated team will work tirelessly to find a comprehensive and affordable home insurance policy that meets your specific needs and protects your most valuable asset.

Contact Augustyniak Insurance today for a free quote and let us help you weather the storm!