Having home insurance coverage is an essential part of owning a home. While you can choose the best home insurance policy for your needs, you do not necessarily have control over the industry’s rate calculations.
It may or may not surprise you, but Florida is actually the third largest property insurance market within the U.S.
Similar to car insurance, there are several factors that create the average rate home insurers charge. These factors are largely responsible for mass increases and decreases in home insurance rates as a whole. And, as of 2021, home insurance rates are seeing a significant increase in Florida.
But these rate increases have been building up over the past several years for a few reasons.
“Florida insurers requested 105 rate increases during the first ten months of 2020, Altmaier said. More than half of the increases that regulators approved were greater than 10%.” – Carrier Management
Why Florida Home Insurance Rates are Increasing
There are a variety of reasons why home insurance companies may raise their rates, but it does not typically ruffle any feathers. However, now, Florida’s homeowners are experiencing substantial spikes from their home insurers.
The following are a few reasons why home insurers are raising their rates in the Sunshine State.
#1 Previous Hurricanes
Hurricanes in Florida can pack a powerful punch and cause catastrophic damage to properties. With lingering damage from hurricanes that have blown through over the past few years, home insurers have helped mitigate the cost of those losses and are now playing financial catch-up, resulting in higher rates.
#2 Florida Litigation and Fees
Florida litigation also plays an important role in rising home insurance rates. A section of the law can actually require the insurer to pay attorneys’ excessive fees. This helped open a door for contractors and lawyers to work together to encourage homeowners to sue insurance companies for more than they are actually owed, such as for the cost to replace an entire roof rather than the few damaged tiles.
#3 Aging Plumbing
Aside from damage caused by severe weather conditions, the plumbing in an older home is much more likely to burst or leak. As a structure ages, it tends to have more and more issues, such as an old pipe that bursts, which can quickly cause substantial damage to any home and take a toll on the home insurer’s ability to stay afloat.
Home Insurance: Moving Forward
“Insurers are hoping Florida’s state government will approve proposed legislation that would curb the elevated litigation costs they have seen in recent years. The bill, if passed, would add to other reforms enacted in 2019.
Measures would include limiting the fees insurers must pay lawyers in claims disputes, shortening time frames for filing claims and capping payouts for roof replacements.” – Carrier Management
Though you may have little control over the rise in home insurance rates this year, you still have plenty of affordable options that will meet your needs and help protect your family and property. Reach out to our team at GWK Insurance or give us a call at (561) 241-0167 to help you find the best home insurance policy for you.