HomeBusinessFlorida insurance ground zero

Florida insurance ground zero

We are on the brink of hurricane season and this year promises to be an active one, so what goes hand in hand with hurricanes? Insurance.

We’re talking here about homeowners’ insurance, although flood insurance is also slated to have increases over the next few years. FEMA is changing the way they calculate flood insurance and revising the factors used to determine their premiums.

High insurance premiums aren’t anything new to Florida. During the 2004 hurricane season, there were five named storms, bringing billions of dollars in damage to the state within a six-week period. After that, many private insurance companies left the state, leaving Citizens Property Insurance Corp., the state-sponsored insurer, as one of the few options.

Homeowners with mortgages, which is about 60% of all owners, are required to purchase property insurance. There are homeowners who have opted to go without insurance if they own their home free and clear or to self-insure. The average annual home insurance cost rose about 20% between 2021 and 2023 according to an insurance shopping site called Insurify, and they are projecting another 6% increase this year.

Why is this happening? Obviously, storms and the higher number of storms that appear in the Atlantic basin are increasing. However, the primary cause is the amount of fraud that has been going on in the state in recent years. In April of 2022, Florida Gov. Ron DeSantis called a special session of the Florida Legislature to address the issue of insurance fraud. At that time according to the Office of Insurance Regulation, Florida accounted for 79% of the nation’s homeowner’s insurance lawsuits.

Insurance companies reported $1 billion in underwriting losses in Florida in each of the last two years, much of it due to lawsuits that resulted when homeowners transferred their rights through the “Assignment of Benefits” form. Homeowners would sign a form transferring the full rights of the policy from the policyholder to the contractor, who was working with an attorney.

Once the rights are transferred, the attorneys pay the contractors, usually for roof replacements or repairs, then file a lawsuit against the insurance company, adding up to three times their standard rate. This type of fraud resulted in insurance companies reporting $1 billion in underwriting losses in Florida for the past two years.

The other generator of increased homeowners’ insurance costs is the increase in reinsurance. Insurance companies require their own insurance in order to write policies assuming some of the risk. Reinsurance has increased rates in recent years because of COVID-19, inflation and climate change.

On the positive side, Florida Senate Bill 2022-D has reined in the litigation of this fraud by 20%. This opened the door for private insurers to come back into the state and start stabilizing rates through competition and lower future premiums. In addition, Citizens Insurance has started the process of “depopulation” of their customers, who are starting to go over to private insurers.

Florida may have the largest hurricane risk in the world but we’re not alone. Homeowner’s insurance has gone up along with everything else all over the country. California in particular has issues because of the wildfire threat, and Louisiana is also one of the major targets for hurricanes coming up the Gulf of Mexico.

Ground Zero and our insurance problems may be overstated, but we are certainly volatile and subject to the whims of the weather. Again, the price we all pay for living on a sub-tropical coast.

Most Popular

More from Author

Buyers losing hope

Tired of waiting for mortgage rates to come down? You’re not...

Boomers continue to boom

Just when you think they’re too old to influence the smart,...

Cost of American dream rising

Owning a home of your own has been the American dream...

Prepare for hurricane season

Call me crazy, but whenever the hurricane predictions are disclosed for...

First win for Shady Lady

ANNA MARIA – After two halves of youth soccer action, team AMI Coconuts could not put a point on the scoreboard against The Intuitive Foundation squad in the 8- to 10-year-old recreational soccer league at The Center of Anna Maria Island. The Coconuts team put up a strong...

Buyers losing hope

Tired of waiting for mortgage rates to come down? You’re not alone. Every potential buyer out there is waiting for the same thing, the problem is the Federal Reserve isn’t moving the needle, so it might be a long wait. The Federal Reserve made no move in their...

Try a beach fishing adventure

Are you an accidental angler? Someone who might not be passionate about fishing but who has always wondered what all the hype is about? Maybe you’re an avid freshwater angler from the north unfamiliar with the salt. Whatever your situation, if you want to get a taste...

Latest Pine Avenue bid rejected

ANNA MARIA – Following Mayor Dan Murphy’s recom­mendation, the city commission rejected the latest Reimagining Pine Avenue bid received from C-Squared. On May 9, the commission voted 5-0 in favor of rejecting C-Squared’s approximately $1.4 million bid to construct a one-block Reimagining Pine Avenue prototype area that was...

Candidate qualifying commences soon

ANNA MARIA ISLAND – The candi­date qualifying periods will soon begin for those seeking election or reelection during the 2024 election cycle. Anna Maria provides a two-week qualifying period. Bradenton Beach, Holmes Beach and Manatee County provide one-week qualifying periods. All city commission and may­oral terms on the...

Farrington secures petition signatures

MANATEE COUNTY – Mana­tee County Supervisor of Elec­tions candidate Scott Farrington has secured enough petition signatures to avoid paying a $10,133 qualifying fee. The one-week qualifying period for county candidates begins on Monday, June 10 at noon and ends on Friday, June 14 at noon. Farrington will face...

Captain: Derelict boats looming issue

CORTEZ - Tour boat Capt. Kathe Fannon is questioning why authorities are focusing on the removal of Raymond “Junior” Guthrie’s net camp from the waters off Cortez while ignoring more than 20 derelict boats in the same waters. “The net camp is who we are, it’s our heritage,”...

Season’s first shorebird nest discovered

BRADENTON BEACH – The first shorebird nests this year on Anna Maria Island have been spotted and marked by Anna Maria Island Turtle Watch and Shorebird Monitoring volunteers. A colony of least terns began nesting the week of May 6 at an undisclosed location in Bradenton Beach. A...

Mayors discuss law enforcement consolidation

ANNA MARIA – Anna Maria Mayor Dan Murphy and Holmes Beach Mayor Judy Titsworth are not on the same page when it comes to the potential consolidation of law enforcement services, with each mayor preferring their city’s law enforcement agency take over policing in both cities. As is...

March tourism numbers soar

ANNA MARIA ISLAND – March tourism numbers are up from last year in all three Island cities, significantly so in the City of Anna Maria. Each month, the Manatee County Tax Collector’s Office reports how much income the county’s 5% tourist tax produces. The tax is collected from...

Water quality advisory in effect at Palma Sola

PALMA SOLA - The Florida Department of Health in Manatee County (DOH-Manatee) has issued a water quality advisory for Palma Sola South due to high bacteria levels. Tests on May 6 and 8 indicate that the water quality at Palma Sola South does not meet the recreational water...