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Florida Home Insurance Rates Drop Along With Claims

If you’re looking for homeowners insurance, Florida rates can seem astronomical. Florida is the most expensive state in America for insurance for the home, and there’s little relief in sight. The typical premium for the average house in Florida is close to $2000 per year. That’s more than four times the cost of insuring a house in the least expensive state, Idaho. Florida homeowners insurance is more than double the national average, and continued cost increases could threaten the state’s reputation for a low cost of living compared to the rest of the nation.

Hurricane Claims Are Down, Profits Are Up For Insurers

Florida insurers are enjoying profitable years as hurricane claims are way down recently, and that’s making state insurance regulators examine homeowners insurance Florida rates more carefully. Florida has a recently instituted a state-run homeowner’s insurance pool called Citizens Property Insurance as well as more traditional free-market policies offered by private insurers. Some observers expected Citizens Property to put downward pressure on rates, but in the latest year with available figures, adding Citizens data into the average added almost 25 percent to the premium average. This increase may be attributable to Citizens offering coverage to homeowners living in the riskiest properties for insurance, which would command even higher premiums in the private market, or might even be uninsurable. Citizens Property now accounts for almost 20 percent of the entire home insurance market in Florida.

 

It’s sometimes difficult to estimate the true cost of insurance by looking at state to state averages because of big variations in real estate value, potential hazards, including natural disasters, and economic conditions.

Homeowners Insurance Doesn’t Cover Flooding

In Florida, customers are less interested in comparisons to other states, and only need to look at the number at the bottom of their yearly bill to know how expensive homeowners insurance in Florida is getting. Some residents and regulators have also raised concerns about the potential for their insurers to fold if they’re faced with a cataclysmic natural disaster that would strain their already shaky reserves, despite the high rates they are charging.

 

It’s important to note that the high cost of homeowners insurance is only the beginning for weary Florida ratepayers. Flood insurance is not calculated in when discussing home insurance, and flood insurance rates are skyrocketing as well. Damage by flooding is specifically not covered by standard homeowners insurance policies. Rates are set on the federal, not the state level, and flood insurance policies can add thousands more to the cost of insuring even a modest home in Florida. Even long-time residents are feeling the pinch as older homes in low-lying areas are singled out for dramatic rate increases.

High Insurance Rates Threaten Florida’s Reputation For Low Cost Of Living

When people move to Florida to retire, work, or to buy a vacation home, they’re often pleasantly surprised by the congenial climate, low property taxes compared to many states, and no state income tax, but insurance rates are becoming an unpleasant surprise for just as many, and could eventually make Florida less attractive for new citizens.

Florida Home Insurance Rates Continue To Drop

The premium bill comes in the mail and it is a familiar scene played out all across Florida. You stand there, shaking your head, wondering why the homeowners insurance rates in Florida continue to drop.

The answer, unfortunately, is probably not one that you want to hear. According to a recent report by the National Association of Insurance Commissioners, residents of the state of Florida are now paying an annual premium of approximately $2,000 a year for property insurance. That figure is more than double over the national average of just under $1,000 annually. Additionally, owners of Florida condominiums are paying just over $800 a year, while residents of other states pay half that price.

Despite the fact that the state of Florida has not seen a massive hurricane in almost 10 years, homeowners insurance rates in Florida are continuing to climb with no end in sight as approvals for rate increases are passed by state regulators year after year.

Obviously, all of that is the bad news. The good news, if there is any, is that there are some indications that rates could begin to stabilize or even come down in the near future.  While that does not offer any immediate relief to a family budget, it does provide a glimmer of hope that rates will decrease and homeowners will begin seeing some form of financial relief.

Insurance executives in the state of Florida argue that of the 10 most expensive national disasters in the history of the United States, five have occurred in or had an effect on Florida. Those catastrophes had a devastating effect not only on repair costs, but on reinsurance protection rates as well.
Despite that, Florida residents as well as consumer advocate agencies are pushing hard to get homeowners insurance rates in Florida in line with national averages. And it is not all bad news as state regulators have voted in numerous provisions over the last five years that help to protect homeowners interest.

Some of these new or improved provisions include the creation of a mandatory policy checklist to be completed by insurance agents, which details what is covered under a policy. Additionally, insurance companies are now required to pay homeowners up front for the full replacement cost, and not just the lower cash value on home repairs. Homeowners have also benefited from an expedited claims process, which forces the insurer to respond to a claim or begin communication with an insured customer within 14 days of a disaster.

Other noted provisions have also been welcomed with open arms by Floridians, including the requirement for all Florida insurers to provide an apples-to-apples comparison of rates and policies. This provision alone has made insurance policy shopping a much easier and streamlined process for Florida residents. Additionally, any request for rate hikes of over 15 percent must now be publicized and a public hearing held so interested parties can voice and state their opinions.

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