Home insurance rates in Florida to significantly increase next year

Home insurance rates in Florida to significantly increase next year | Insurance Business America

Home insurance rates in Florida to significantly increase next year

Insurance rates in the state of Florida are set to increase next year, and experts are concerned that the industry is headed towards a crisis.

For 2021, Florida’s Office of Insurance Regulation has approved insurance rate increases as high as 33% – a figure within the projections of some industry experts based on the hardening market.

Read more: Homebuyers flock to Florida; but insurance rates cast a cloud

Michael Carlson, CEO of Personal Insurance Federation of Florida, believes that the rate increases are a symptom of worsening issues within the state’s insurance industry.

″I’m afraid that people on fixed incomes and people on limited means just can’t afford these increases, and are going to be driven out of their homes,” Carlson told WJXT Channel 4.

According to Carlson, the insurance rate increases are a response to surges in reinsurance costs for insurers – but this is not the only factor. The other major factor driving the increases is the rise in fraudulent repair work in Florida offered by unscrupulous contractors.

″Sometimes roofs are being replaced with no damage. Sometimes roofs are being damaged by unscrupulous contractors who are trying to set up a claim. And sometimes roofs are not even repaired by a contractor who has engaged the homeowner to do repairs,” he said.

Although there is only a small group of fraudulent contractors in Florida, Carlson noted that they still have a significant impact on the state’s insurance rates. If they get into a dispute with an insurer, those contractors could launch a lawsuit to force the insurers to deal with having to pay attorney fees – additional costs which are ultimately absorbed by consumers in the form of increased insurance rates.

″It’s really unfortunate rate payers are paying, and even worse is folks are being nonrenewed, and in parts of the state, notably along I-4, there are ZIP code areas where insurance companies are refusing to write new business on the property area because the cost of claims and related litigation in those parts of the state are so dramatic that the insurers don’t believe they can actually do business in these areas,” Carlson said.