What's Happening with Florida Personal Insurance?
By CRA
If you live in Florida, you probably pay more for insurance than you’d like. Florida personal insurance rates tend to be much higher than the national average.
Worse still, some people have even had their coverage canceled. Here’s what’s happening with homeowners and auto insurance and how you can secure the coverage you need, despite the challenges.
Florida Homeowners Insurance
The Insurance Information Institute says Florida homeowners pay the highest average rate in the country – almost three times the national average.
The high rates are partially due to the major hurricanes that have battered the state. However, lawsuits and assignment of benefits (AOB) abuse have also contributed to the problem. Unethical roofing contractors persuade homeowners to sign over AOB and then file lawsuits on the homeowners’ behalf. Although only 9% of all homeowners insurance claims in the country are from Florida, the Insurance Information Institute says the state accounts for 79% of all homeowners insurance lawsuits over claims.
Recent legislation aims to curb abuse, but it will take time before homeowners see decreasing rates. According to the Tallahassee Democrat, lawmakers have predicted that rates will start to come down within a year to 18 months, but the Florida Insurance Commissioner has not confirmed a timeline. In the meantime, the average annual premium has shot up to $6,000 – 42% higher than it was in 2019.
Some homeowners are losing coverage as insurers exit the state or become insolvent. ABC Action News says Nationwide Insurance recently notified some homeowners that the insurer would not be renewing their policies. Many homeowners have had to turn to Citizens Insurance (the state’s insurer of last resort), but the Pensacola News Journal says an investigation has been launched over concerns that Citizens would be unable to cover losses in the event of a severe hurricane.
Florida Auto Insurance
Floridians also pay more for auto insurance. According to R Street, full coverage costs an average of about $2,500 a year. These rates are among the highest in the country and have risen sharply in recent years – in 2020, the average auto insurance premium was only $1,300 for full coverage. Several factors may be to blame, including the state’s no-fault system and personal injury protection (PIP) requirements as well as a high rate of uninsured and underinsured drivers.
Once again, AOB abuse is contributing to the problem. According to the Florida Justice Reform Institute, there were 591 windshield lawsuits in Florida in 2011. In 2022, there were 37,000 lawsuits. This has driven up costs for all Florida drivers. To address the issue, Governor DeSantis has signed Senate Bill 1002, which aims to end AOB litigation for windshield repair.
Other Insurance Considerations
It’s not just the homeowners and personal auto insurance markets that are struggling right now – recent trends impacting flood and commercial insurance could also affect your costs.
• Your condo association fees may be increasing. Stricter regulations are causing condo association insurance premiums to surge. Associations may pass these costs onto the unit owners.
• If you are trying to build a house, your contractor may have trouble securing builder’s risk insurance for the project. According to The Real Deal, some developers in Florida are delaying projects due to high insurance premiums and other costs.
• Your flood insurance premiums may be changing. The National Flood Insurance Program (NFIP) has rolled out a new risk rating model, which is impacting rates for millions of homeowners.
Tips for Surviving Florida’s Personal Insurance Market
This is a challenging time for homeowners and drivers in Florida. According to Newsweek, some Florida homeowners are considering dropping their insurance, selling their homes, or leaving the state due to the high insurance costs.
Before you resort to any of those extremes, contact us to discuss your options. If your rates are rising, you’ve received a notice of non-renewal, or you just want a second opinion, Century Risk Advisors can help you review your personal insurance options. We are an independent brokerage, licensed in all states with many carrier connections. We can provide objective advice and access to solutions that may not be available through your existing insurance partner.