To illustrate how the issue of property insurance in Florida has become a full-blown crisis, just look at how Brandon insurance agent Kevin Swanson’s annual fees have escalated in recent years.
What you need to know
- The annual cost of the average homeowner’s insurance policy in Florida is expected to rise to $4,231, nearly three times the annual U.S. average of $1,544, according to a recent analysis.
- According to the Florida Office of Insurance Regulation (OIR), Florida accounted for 79% of the nation’s homeowner’s insurance claims filed, while accounting for only 9% of the nation’s homeowner’s insurance claims.
- Citizen’s Property Insurance Corp., the state’s last property insurer, has seen its policyholder reach one million customers. That’s more than double the number the insurer had at the start of 2020
From 2013 to 2018, his annual homeowner’s insurance policy cost him about $1,800. But last year his rate rose to $3,823.
“A 238% increase? This is not sustainable and it will create an unaffordability in the state of Florida for people to move down here and live in Florida,” Swanson told Spectrum Bay News 9 last week.
Homeowners insurance policies have skyrocketed in 2022, driven by fraud, lawsuits and escalating property values. Property insurers are leaving the state, prompting more people to sign up with Citizens Property Insurance, the last state-backed insurer.
The dire situation prompted Gov. Ron DeSantis and the Florida Legislature to convene a special session to address property insurance in May. The Legislature approved $2 billion to help insurers pay hurricane damage claims, limit lawsuits against the companies and make homeowners bear more of the cost of replacing roofs. This led Governor DeSantis to declare that the session had led to “the most significant reforms to Florida’s property insurance market in a generation.”
Brandon-based property insurance agent Kevin Swanson says Gov. DeSantis should call another special session to deal with the property insurance issue right after the November election (Mitch Perry/Spectrum Bay News 9)
But according to an analysis by the Insurance Information Institute, problems with Florida’s property insurance market “appear to be escalating” because the Legislature did not take strong enough action to address the crisis.
“That’s why we’ve seen two companies declare bankruptcy since the special session,” says Mark Friedlander, Florida spokesman for the Insurance Information Institute. “We’ve seen eight other companies announce a moratorium on writing new business, including one company that said they’re planning to leave the local market because the Legislature hasn’t resolved the crisis. Their concern is that this is a losing battle. We cannot continue to operate in a market where cost pressures are so high due to litigation. We cannot survive in that scenario.”
Swanson agrees.
“I hope the changes will work in time,” he says. “But I’m more hopeful and more optimistic that after this election, our legislature will get to work and start fixing this for the Floridian homeowner.”
The issue is potent for voters this election year.
“The main concerns I hear are people leaving their insurance company, which results in people going to Citizens Insurance at a premium rate, or their carrier renewing them at a higher rate than last year, ” attorney Jesse Philippe, a Democratic candidate. for the House District 62 seat this month. “This is a quiet issue that affects a lot of people in the district.”
Among the tens (if not hundreds) of thousands who have lost their policies this year is St. Petersburg attorney Rohom Khonsari, who said he initially didn’t know where to turn when he was told by his carrier that they were being dropped. from his policy.
“Because if this company went bankrupt, I didn’t know what policies other companies would have available,” he says. “I realized that if this was a problem with this company, it would be a problem for a lot of different companies.”
The two top Democrats running to challenge Gov. DeSantis in November, Charlie Crist and Nikki Fried, have laid out broad plans to address the crisis if elected.
Fried called on DeSantis earlier this month to use the Florida Hurricane Catastrophe Fund instead of Citizens Property Insurance as a reinsurance vehicle, reform Florida’s hurricane catastrophe fund to be more accessible to companies smaller and cancel the rate increase of 6.4% for Citizens’ Property Insurance. Recently approved OIR. She has also called for the appointment of a task force that will focus on preventing fraud, frivolous lawsuits and ways to recruit new providers to the state and increasing the authority of the State Insurance Advocate to serve as a consumer advocate.
Crist unveiled his plan to tackle property insurance reform in May. His proposals include eliminating the 25% surcharge that homeowners pay to the Florida Hurricane Catastrophe Fund; creating an insurance fraud task force to crack down on fraudulent claims and make companies that sell auto insurance policies in the state sell homeowners insurance policies.”
Swanson says the issue transcends partisan politics and must be addressed, otherwise he claims “Florida will become unaffordable for the average American.” It calls for Governor DeSantis to call another special session to deal with property insurance right after the November election.
According to the Florida Office of Insurance Regulation (OIR), Florida accounted for 79% of the nation’s homeowner’s insurance claims filed, while accounting for only 9% of the nation’s homeowner’s insurance claims.