Written by: Austin Williams, Vice President – Personal Division
I wanted to give an update on the Florida insurance market. As I am sure most of you are aware if you have shopped your homeowner’s insurance policy recently or received your renewal for your current homeowner’s policy, rates in Florida are going up and carriers are getting stricter on the business they write.
According to an article posted in the Insurance Journal this past October, unchecked claims litigation from non-catastrophe water losses is on the rise and a major cause for rising rates. There has been little help from Florida legislation regarding this issue. Year over year, there has been a significant increase in claims that go to litigation which has furthered losses these carriers are seeing. Barry Gilway, president and CEO of Florida’s Citizens Property Insurance Corp., said “litigation for the state-run insurer of last resort has increased in some parts of Florida by 500% in the last four years.”
All of this has caused a volatile Florida insurance market. The reinsurers (a company that provides financial protection to insurance companies) for the Florida carriers have responded to these large losses by increasing renewal rates for the carriers by an average of 25%-30% – the largest increase in 15 years. These reinsurance costs are the largest expense for some carriers and often dictate a company’s underwriting guidelines, how much business they can take on, coverage reductions, etc.
What does this mean for the Florida homeowner? Lack of availability, reduced coverage, increased premiums, and stricter guidelines, particularly for your roof and the plumbing of your home. To curb claims and continue to be profitable, carriers are taking drastic measures to offset these large losses, such as no longer accepting homes built before 2010, only accepting a roof that is 10 years or newer, and limiting or even excluding water damage on older homes.
This is affecting all carriers that write in the state of Florida, but not all carriers are equal in their rate increase and what they require. Some carriers are only taking a 5% increase, while others are increasing upward of 50%. While some carriers are limiting their roof age, others are still accepting shingle roofs with no age limit, assuming they are still in good condition.
The market in Florida is getting tough, there is no doubt. That is why it is more important now than ever to find an independent insurance agent that will take the time to help you find the best coverage for your home and an annual premium you are comfortable with. Our agency, 925 Partners, will take the time to make sure you have exactly what you need.
Please give me a call at 904.906.6162 or call our main office line at 855.925.1200 or visit our website for more information: www.925partners.com