Thinking about moving to Florida? It's easy to see why. The place is beautiful. I lived there for nine years and enjoyed it. I recently moved back to Oklahoma because of among other reasons, a lower cost of living and slower lifestyle. There is, however, a disturbing trend to take into consideration.
One of the biggest drawbacks to life in Florida is the hurricanes. It's not just the idea of evacuating and recovering from possible losses, it's the matter of losses being covered. Recently, some victims of Hurrican Ian got an unpleasant surprise. While they thought their losses were covered, their insurance company begged to differ.
Was the damage the result of hurricane winds or floodwaters?
That's the issue many homeowners debate with their insurance companies after experiencing a loss. It seems that the purchase of flood insurance is declining despite increasing losses due to flood. The obvious reason for this is price. A restructuring of FEMA's prices for flood insurance has resulted in a spike in prices for flood insurance.
Ironically, an increase in the severity of hurricanes has resulted in more of a need for flood insurance, which is obviously driving up the cost. It's devastating cycle.
Some homeowners have been taken by surprise
Florida homeowners' insurance policies must state: "Your homeowner’s insurance policy does not include coverage for damage resulting from a flood even if hurricane winds and rain caused the flood to occur.” And it's not in fine print. That information is to be presented in 18-point bold font four sentences. Still, some homeowners seem to be caught unawares. Part of the issue might be the fact that more of these policies are being transmitted via email.
The Florida insurance market is feeling the strain
Obviously, this situation has created some turbulence in the Florida insurance market. A whopping eighty percent of homeowners insurance lawsuits in the United States are filed in Florida. In addition, insurance premiums are skyrocketing. In some cases, rates are seeing a double and even triple digit increase. Homeowners are caught in a real squeeze.
Some Insurance companies have also been impacted in a negative way. Some small insurance agencies have gone out of business while larger insurance companies have cut back on the business they write in Florida.
More Florida homeowners are using the "insurer of last resort.,"
That would be the state backed Citizens Insurance. Citizens has seen a massive surge in policyholders in recent months. While in some case Citizens may be the only option available, getting insurance through the state backed company is not without some downside. It behooves homeowners to do their homework.
Meanwhile, some homeowners are still reeling from damage that resulted from Hurricane Ian
As of November 30, 2022, more than 380,000 homeowners had filed Hurricane Ina related insurance claims according to the Office of Insurance Regulations. At the time this information was available, more than half of those claims were closed. Of those closed claims, almost 95,000 were closed without payment.
Some homeowners have received checks for $500 or some other relatively small sum and are unsure whether to cash them or not. They fear cashing the check will be an indicator the claim has been settled in full.
In some worst-case scenarios, homeowners have been left with a mortgage and no home, or insurance money on the horizon.
The home insurance situation if Florida seems to be unlikely to improve anytime soon.
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