Source: Insurance Business Magazine
Author: Lyle Adriano
Date: August 9, 2021
Those looking to renew their homeowners’ insurance in Florida are being blindsided by significant premium increases, as the insurance situation in the state grows complicated.
According to Dulce Suarez-Resnick, who has 30 years of insurance industry experience, Florida homeowners are, on average, seeing their insurance premiums surge between 25% and 60% at renewal. She also told NBC 6 that she herself is facing such premium spikes, due to insurers being increasingly wary of covering properties with old roofs.
“I had a 40% rate increase and I couldn’t go to any other insurance company because technically to them, my 20-year-old roof is too old,” Suarez-Resnick said. “So I had to increase my deductibles and I had to look at my coverages, maybe make some adjustments there.”
Suarez-Resnick added that the situation is made even more difficult thanks to the pandemic.
“Last year, a lot of people weren’t working …their income may not have been the same for those who own homes and this is just another burden.”
Insurers’ reluctance to cover for older roofs may have to do with the unchecked insurance fraud and litigation activity involving such claims. According to Federal Association for Insurance Reform president Paul Handerhan, insurers are less worried about whether an old roof can still function or not, and more about how old roofs attract roofing contractors looking to claim big on repairs by getting homeowners to sign away their benefits.
While some Florida homeowners are seeing their renewal rates increase, the more unfortunate ones are being flat-out denied coverage.
Mark Friedlander of the Insurance Information Institute told NBC 6 that tens of thousands of Floridians recently received either a non-renewal or mid-term cancelation notice.
“If you do get a notice, first thing we tell people – don’t panic,” Friedlander advised homeowners. “Call your insurance agent as soon as you can. Talk to them about what your options are.”
But Friedlander warned that those options could be limited, and would force many to turn to Florida’s insurer of last resort, Citizens Property Insurance.
“They’re averaging about 5,000 new customers a week,” he said. “We’re talking about 750,000 policies under Citizens by year-end 2021. They will be the largest writer of property insurance in the state and that’s a very unhealthy situation for Florida.”
Although it has been nearly three years since a major storm devastated Florida, Friedlander said that private insurers reported $1.7 billion in losses in 2020 – more than double their losses in 2019. These losses were attributed to increased litigation and insurance fraud, particularly fraudulent roofing claims.