Why Is My Homeowners Insurance Increasing?
July 21, 2020
Florida’s property insurance market is facing some serious trouble from excessive litigation associated with roof, water, and prior hurricane claims. Re-insurers, which essentially are insurance companies for smaller insurance companies, have been raising their prices on their product to recoup their losses. Last month renewals increased as much as 20-50 percent over the prior year; making it extremely hard, if not outright impossible, for some carriers to purchase their desired level of coverage. With the pandemic and promises of an overactive hurricane season, it doesn’t look like prices will be going down anytime soon.
With all these increases it is becoming more and more apparent that Citizens will be insuring more and more property in Florida. Citizens is a not-for-profit government entity designed to provide property insurance to Florida property owners that are unable to find private insurance. This is not seen as a favorable outcome because Citizens is run by the State, and thus whenever there is a catastrophe that results in claims being filed that depletes their cash reserves, premiums could be assessed up to 10 percent. They are also exempt from the bad faith statute, meaning if they handle your claim poorly there is nothing you can do about it. There are also differences in the coverages you are able to get through citizens versus private insurance companies.
There are several different indicators that are pointing towards Citizens gaining more and more of Florida’s property insurance, here are a few:
- There are increasing numbers of private market policy non-renewals and cancellations, and Citizens weekly net new policies is increasing.
- Many property insurers restrict new business in the tri county (Dade, Broward, and Palm Beach) and now in central Florida (Seminole, Orange, Lake, Osceola) making it increasingly harder for people to find another source of insurance in those counties besides Citizens.
- Many companies are changing their guidelines to require roofs to be less than 9-10 years old to qualify as new business.
- Citizens is becoming more competitive due to the rise in re-insurers prices.
At Schlitt Services we are an independent insurance agency which means we are able to shop around in the homeowners’ market and find the best option for you that will make sure you are properly covered.