Florida currently has the highest homeowners insurance premiums in the nation, averaging about $6,000 per year.
And some Floridians have fewer choices as companies like Farmers and Progressive drop policies, leaving some to struggle to find a replacement or having to go with Citizens, the state's insurer of last resort.
Some Homeowners Leaving: The increased prices and fewer choices have caused some Floridians to leave the state, like Robert and Shannon Hoffman, who left their Largo home for Tennessee because they could no longer afford their soaring homeowners rates.
Frivolous Lawsuit Legislation: The state of Florida has passed legislation intended to decrease frivolous lawsuits in an attempt to partly address high homeowners' premiums.
The Expert's Take: Some experts say if Floridians expect these changes to bring about a decrease in premiums, they may well be disappointed. Yet, others say that if Floridians are patient, positive changes may be on the horizon. Here's why and let's start with those who don't expect change:
The Cost of Repair Or Replacement Has Risen Substantially: Mark Friedlander, spokesperson for the Insurance Information Institute, told The Tampa Bay Times in October of 2023 that the cost of repairing or replacing a damaged home has risen by 55% since 2019.
George Hosfield, senior director of home insurance for LexisNexis Risk Solutions, told The Times in the summer of 2023:
"The more it costs to hire a contractor and buy wood, concrete, and other materials, the more insurers have to pay to rebuild a house — and the more they charge in premiums to cover their costs."
The Cost Of Reinsurance Is Rising: Simply put, reinsurance is an insurance policy for insurance companies, and a way to transfer and minimize some of their risk.
According to the state’s Office of Insurance Regulation, the cost of reinsurance has risen 27% this year. Friedlander says that this is a cost that "is going to be a pass-along."
Home Values That Continue To Rise Are More Expensive To Insure: According to Norada Real Estate Investments, Florida real estate has risen an average of 80% over the last five years.
Because Florida's homes are now worth more, the cost to insure them will rise in kind.
While the experts above did not hold out much hope for a quick fix for Florida's insurance issues, others say that help may be on the way. Here's why:
The Argument That Insurance Rates Are Now More Reflective Of Litigation Instead of Risk: Some experts say that Florida's recent tort reform may be starting to pay off as more insurers appear to be basing rates on litigation rather than risk - and the litigation issue will begin to abate.
Kyle Ulrich, president and CEO of the Florida Association of Insurance Agents, told WESH:
"(We're) starting to see areas of the state like Central Florida having an increase in pricing that is not so much reflective of the catastrophic risk, but reflective of the actual loss costs that have been sustained by carriers as a result of many of the roof claims and resulting litigation that came from those. We are hopeful that..moderating reinsurance costs and (in) some data that's starting to show that litigation is coming down that there will be more competition, more availability and ultimately better pricing for consumers in the next 12 to 24 months."
A Proposed Rebate Program For Seniors: In early November of 2023, Florida Senate Minority Leader Lauren Book proposed legislation that would offer assistance to low-income senior citizens.
Of the proposal, Leader Book said:
“In the face of Florida’s ongoing property insurance crisis, we’re fighting to provide relief to low-income seniors from skyrocketing premiums. Our state economy is booming, but seniors in my district are on the brink of losing their homes because they cannot afford property insurance. That is just not acceptable.”
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