In December, 2019, a 4.6% increase in statewide insurance rates for residential and commercial property was approved by OIR or Office of Insurance Regulation in Florida. This increase affected most multi peril policies of homeowners with a few exceptions. A few counties that are perceived as relatively safer did not witness a sharp increase and some insurers were more generous than others. Those that did not raise their premiums for homeowners insurance in Florida waited for the assessment of the aftermath of Hurricane Irma. Others were prompt to increase the annual costs.
In 2020, the cost of homeowners insurance in Florida continues to rise and this phenomenon is nearly statewide with very few exceptions. Those along the coast have to endure the worst as premiums are not going to stagnate anytime soon. Three devastating hurricanes last year caused losses and damages worth more than eighty billion dollars. Insurers cannot bear such costs and keep premiums unchanged, especially in states like Florida where the likelihood of immense damage is substantial, considerably more than inland states that are not as often battered by hurricanes as the seaboards.
When will it stop?
The rates of homeowners insurance in Florida are increasing and the scenario will not be reversed or be moderate in the near future. This is definitely owing to the catastrophe caused by natural events but there is also another crucial element. There have been innumerable accusations of abuse and fraud, mostly pertaining to the benefits clauses. Many insurance companies have clauses that enable third parties or businesses to claim coverage on behalf of the insured homeowner. This is mostly for services delivered to homeowners who have coverage against the damages that have been attended to. These third party businesses have not been strictly reasonable or even factual. More cases of falsified claims are tumbling out as insurers get down to stringent audits, more extensive investigations and a holistic assessment of their own policies. This scenario is not unique for the state. Many other states are dealing with such menaces.
At a time when the cost of homeowners insurance in Florida is already at an all time high in recent memory, any further increase can make life difficult for ordinary citizens and all those who want to opt for coverage protecting their asset and financial wellbeing against multiple perils. It is difficult to ascertain if there will be any relief and the only respite is to look for the more reasonable insurers that would provide enough coverage but at an affordable annual cost.