People insure their homes to protect their investment against multiple types of damage, but many Florida residents are discovering they no longer have insurance or can’t get coverage. Florida is facing an insurance crisis and experts expect the situation to get much worse before it begins to get better.
Expenses from natural disasters have sent costs soaring for insurance companies and several insurers received approval from the state regulator to summarily drop thousands of policyholders. Insurers say the risk of insuring certain properties is just too risky. Several national companies have left the state and others are in receivership or liquidation due to financial losses. Insurers are also blaming fraud and frivolous lawsuits for their problems.
The ratings of companies remaining in operation are dropping, which means they may not be able to operate due to downgraded ratings. They won’t be able to provide coverage for homes with federal mortgages. Many insurance companies aren’t writing any new policies, some are capping coverage, offering less coverage, and dropping established customers for issues such as having an older roof.
Should a large storm or hurricane hit the region, it could exhaust an insurance company’s ability to pay. If that happens, surcharges would be leveled against policyholders. If the insurance company still had a deficit, it would levy assessments on residents. Individuals could easily find themselves paying a significant portion of their repairs and restorations. At least one insurance company has petitioned the Office of Insurance Regulation to approve an 11 percent rate increase.
One remedy being considered is policies that only offer depreciated values on damage, which insurers say would lower premiums. However, it’s a solution that would cost homeowners more out-of-pocket.
The insurance crisis is looming large over homeowners. Individuals can shop around for less expensive coverage or consult with their insurance agent about obtaining a different level of coverage. Homeowners will have 45 days to find a new insurer if they’re dropped. Be aware that a new policy typically requires a four-point inspection, along with a wind mitigation inspection, which will run about $100.
For more information about how The Sena Group can help you with any
of your insurance needs, please contact us at 561-391-4661.
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The Sena Group
6501 Congress Ave., Ste. 100
Boca Raton, FL 33487