What is going to happen with my property insurance this year in Florida?
Note: At Max Life Realty we strive to help you make smarter financial decisions, the help readers understand how insurance affects the finances, we have started getting our insurance license in house next year we will be able to quote the best policy’s. Is our target to help you save money.
Current Florida Home Insurance
The FL home insurance market has spent most of 2022 going down toward collapse, however recent legislation simply may avert disaster. Max Life Realty and property management took a deep dive into the FL insurance trade to get the reason behind the matter and to report on the projected solutions for 2023. We are able to let you know why the FL home insurance crisis is going on and your choices if you receive a cancellation or nonrenewal notice on your owner’s policy.
Keys To Understanding Insurance in Florida
- Florida accounts for 9 percent of the insurance market in USA, but 79 percent of the insurance lawsuits, many of them considered fraudulent.
- Because of the fraudulent lawsuits Florida is considered high risk to insurance companies, and has had two bad years of trouble with net underwriting losses over $1 billion.
- Devastating hurricanes will put more strain on the insurers and could make this even worse.
- Hurricanes are going to continue to get worse and worse as climate change keeps happening
- Governor Ron DeSantis signed a second insurance reform bill into law on December 16, 2022. This new bill may help stabilize and regulate the home insurance market. Read the paper here.
So what is the Florida Insurance market crisis?
Simple, the insurance companies cannot pay out the claims and they collapse financially. Since 2017 six property and casualty companies have liquidated in Florida. See the most up to date list of LIquidations here. Other insurance companies are leaving the state in all and others are nonrenewing hundreds of thousands of polices. The good companies who have robust systems to prevent fraud and lower payout are adjusting policy’s to stay in business. This is pushing the insurance market tighter and of course you know what that means, higher prices, higher deductibles, and yes money out of your pocket.
Fraudulent Insurance Claims, hopefully this is new news to you!
- Roofing companies love storms, there business is new roof and it is much easier to convince an insurance company to fork over 15-30k for a new roof than a homeowner. Many times the home did not need a new roof or it was not damaged by the storm it was just normal wear and tear. Check out www.RoofClaim.com or call a local roofer he will be at your house within 24 hours to find damage and get a new roof put on and of course your insurance company will pay and they will cover the deductible with a large overquoted price.
- The next step is for the homeowner to sign over the assignment of benefits and give the roofing contractor the right to file the insurance claim, and they are experts at this. As they have a future paycheck on the line the have vested interest in getting as much as they can from the insurance company.
- Claims adjuster is schedule to the claim and either finds no damage or far more minimal damage than the contractor found, and the claim is paid out more or less depending on the findings and claims adjuster. Every home is unique so this is a case by case.
- The roofing company then can bring legal action vs the insurance company. Demanding the original quote be paid out if the adjuster did not give the number the contractor wanted.
- The insurance company can either pay out the lawsuit and settle outside of court or fight the case and pay legal cost. Whatever the property insurance company chooses to do they pay someone somehow. Not a good business model.
These fraudulent schemes are happening more and more often, I know I live in Florida and have roofers come knock on my door after a storm.
Age of a Roof on a House
During the purchase of a home, you will get a home inspector to give you a 4 point inspection that states the most important safety areas of a home including the roof age and expected life left on the roof to insurance company. Some key numbers for insurance companies were that the roof was less than 15 years old and had a life expectancy of for years. Companies used to deny policies based on the age but are now prohibited from denying coverage based on roof age alone. If the companies are not comfortable with these restrictions being lifted many of them leave Florida because the know what the future outcome will be on those policies.
What is being done today to stop the insurance crisis in Florida?
Lawmakers and companies are trying. They had Senate Bill 76 passed in July 2021 to try. Prohibiting certain practices by contractors; prohibiting a contractor from executing a contract with a residential property owner for a roofing repair or replacement unless certain notice is included; requiring property insurers, effective a certain date, to include certain data regarding closed claims in their annual reports to the Office of Insurance Regulation; requiring the Property Insurance Corporation to include the costs of catastrophe reinsurance to its projected 100-year probable maximum loss in its rate calculations even if the corporation does not purchase such reinsurance. Florida has limited cost from lawyers as the insurance companies pay for the homeowners lawyer when they win the case this can be expensive adding cost on top of cost. Older roofs can be denied policy based on risk. Florida has opened a fund to help homeowners called MySafe FL Home. You can check it out here.
So what do you do if your policy has been canceled.
Act quickly, it’s possible to get a new policy. Work with your insurance agent/broker to find one. Keep your house up to par and get ready for a new 4 point inspection. Hopefully you get a lower rate on the new policy!
The fradulent claims are going down as florida has put a few laws in place trying to stop fraud. But will it really help? Who knows, just protect your investment and don't worry about all the noise.