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Florida homeowners facing increasing property insurance rates, experts say

Sheldon Dutes Anchor | Updated: 7:32 AM EDT Oct 28, 2022

Florida – Florida homeowners are bracing to spend even more money to insure their homes.

Some industry analysts predict the average homeowner will spend 40% more on property insurance next year because of the storm.

Even before Hurricane Ian unleashed its wrath in the Fort Myers region and drenched Central Florida with devastating floods, Florida’s home insurance market was already buckling under the weight of fraudulent roof replacement schemes, reinsurance costs and litigation.

Just this year, six insurance companies — FedNat, Weston Property and Casualty, Southern Fidelity, Lighthouse, Avatar, and St. John’s Insurance — stopped operating in the state, according to the Florida Insurance Guarantee Association, because they couldn’t pay their debt.

The Insurance Information Institute also said 27 other companies were on an industry watch list before the hurricane over concerns about their financial health.

“The fact that so many companies were in this financial position gave us worry at the time,” said Insurance Information Institute spokesman Mark Friedlander. “And now with the expense pressures of claim filings combined with expected high levels of litigation related to Hurricane Ian, this could drive some of these smaller struggling insurers out of business.”

Before the storm, the Institute determined that Florida homeowners were paying, on average, $4,231 to insure their homes compared to the national average of $1,544.

Earl Madison pays about $3,000 a year to insure his Eatonville home, which is a lot more than he used to pay.

“It was about a thousand, $1,500, $2,000 somewhere around there,” Madison said.

Madison had minor damage from Ian but said it didn’t meet his hurricane deductible.

To make matters worse, he’ll likely have to spend even more money next year to insure his house. 

He and other homeowners across the state could feel Ian’s impact for years to come, regardless of how their homes stood up to the storm.

“We expect the average increase to escalate after Ian starting in 2023 with increases over 40% or more could be very common across the state on average,” Friedlander said.

Madison wasn’t happy about the prediction. 

“Forty percent? That’s too much,” Madison said. “I’ll have to put out more money to somebody else rather than having it in my own pocket.”

The Insurance Information Institute forecasts even darker days ahead.

“We are confident that Florida’s insurance market will become even more unstable going forward in terms of the financial position of smaller regional insurers,” Friedlander said.

But there are protections in place for homeowners across the state.

From now until Nov. 28, your insurance company cannot cancel your policy or drop your coverage.

If your policy would have been canceled during that time, your insurer has to cover you through at least Nov. 28 or a later date.

If you’re looking for home insurance, Kyle Ulrich from the Florida Association of Insurance Agents encourages homeowners to do their homework.

“Availability and affordability of homeowners insurance has gotten to crisis levels here in Florida,” Ulrich said. “It’s still worth shopping. It’s still worth talking to your agent to see if there are options available to you.”

For the second time this year, Gov. Ron DeSantis is calling a special session on property insurance.

The last one happened in May and the next one is scheduled to happen in December.

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