Homeowners Insurance & Your Roof In Florida
What You Need To Know
Why Are Homeowners Insurance Rates Increasing?
Recently, over nine insurance groups have dropped tens of thousands of Florida policyholders. With FedNat being the most recent provider to cancel over 68,000 residential home policies. This has left many homeowners to find a new insurance provider in less than 45 days.
So why the mass exodus from Florida?
Well, let’s put some things into perspective first. On average other states have less than 1,000 insurance claim-related lawsuits in a given year. However, Florida saw more than 100,000 lawsuits just in 2021 alone. According to data released by the Office of Insurance Regulation, 3 out of 4 property insurance lawsuits in the entire United States happen right here in Florida. Largely brought about by unscrupulous business practices of roofing companies.
The bottom line for homeowners is that there is no such thing as a free roof in the insurance industry. Replacement costs are ultimately passed on to the consumers, but many of the smaller insurance providers in Florida cannot operate with losses at such a high level. Therefore, we are witnessing the exodus of insurance providers from Florida.
So What Does That Mean For Homeowners?
Across Florida, many homeowners have received homeowners insurance renewal bills that are 50% up to 100% higher than their previous premiums. This often comes as a surprise to many homeowners who are not aware of the Florida homeowners insurance market’s predicament. With fewer insurance companies in Florida, the market has seen more policy restrictions on the age of the roof, aged electrical panels, specific water supply pipes, and older HVAC systems and water heaters. Most insurance companies are requesting updated Four Point Insurance Inspection Reports just to simply renew existing policies.
Ultimately this comes down to homeowner insurance companies mitigating their risk. This is accomplished by passing the costs of replacing or upgrading systems on to the customers. This isn’t done as a slight to the homeowners, but more so in an attempt to reclarify the purpose of the homeowner’s insurance policies – which exist as a safety net for homeowners in the event of an unexpected loss. It is not intended to be a replacement vehicle for when systems in a home naturally near the end of their useful life. In recent years, especially in Florida, homeowners at the behest of aggressive roofing company sales tactics have been using their homeowner’s insurance policies as a means to receive a “free” roof via shady roofing companies and frivolous lawsuits. This is ultimately the underlying issue that has led to the current strain on the insurance industry.
What's The Way Ahead?
Right now many homeowners with older systems, i.e. Roof, Plumbing, Electrical, or HVAC systems, in their homes are quickly transitioning to the state-backed Citizens insurance company simply to get insurance.
However, this places the State of Florida in a precarious position since one significant storm this year could produce storm loss damages that quickly wipe out the financial reserves of Citizens. This could lead to a storm surcharge for homeowners and every auto owner in the state of Florida just to keep Citizens liquid and ease the financial burden on the state.
Fortunately, Florida legislators have recognized the need for reforms and are working towards a solution that protects the industry from rampant fraudulent claims and extensive litigations all in an attempt to quell the homeowner’s insurance market.
If you find yourself in need of updated insurance reports please give Tier-1 Pro Inspections a call at 407-670-0891 we would love the opportunity to assist you through this process.