Why is Florida home insurance so expensive? There are many reasons, including increased risk. Hurricanes are a huge risk, and home insurance costs have increased to compensate for these risks. Insurers’ cost of hurricane reinsurance increased, forcing many small agencies to follow suit. The result is that Florida home insurance premiums are now higher than they were just a few years ago. However, there are some ways to combat the high cost of insurance in Florida.
Insurers in Florida continue to raise rates due to the increased number and intensity of hurricanes. While Florida hasn’t suffered a major hurricane since 2017, Hurricane Michael left a path of destruction in the Panhandle this year. And despite increased rates, the number of hurricane-related lawsuits filed in Florida is higher than those in any other state. It’s no surprise that the cost of homeowner insurance in Florida is now twice as high as that of homeowners in other states.
The higher cost of Florida homeowners insurance is linked to higher risks of expensive weather-related catastrophes. Florida sits between the Atlantic Ocean and the Gulf of Mexico, and as a result, its weather patterns vary widely from east to west. Because of this, homeowners in Florida are exposed to costly weather-related catastrophes, such as hurricanes and tornadoes. However, these changes have not prevented insurers from increasing premiums.
Other factors that may affect homeowners’ insurance rates include the type of coverage, deductible level, and type of loss. Insurers typically compare historical loss ratios to premium rates and charge higher rates for homes that have a history of losses. Insurers in Florida also factor in the number of Atlantic hurricanes slated for 2020. While these factors do affect insurance premiums, there are some ways to reduce the costs of coverage.
A key factor in increasing Florida homeowners’ insurance premiums is increased risk of natural disasters. Recent hurricanes have led to increased wind damage, which tends to increase premiums over time. This has increased the cost of home insurance by nearly three-fourths since 2016. Hurricanes and wind damage are two of the most common causes of property damage, and the increased risk is driving the costs. Because of the increased risk, Florida homeowners should consider shopping for a better rate.
One factor that makes Florida home insurance so expensive is the potential for major storms. Florida is home to approximately 1.8 million single-family homes at risk of storm surge flooding during a Category 3 hurricane. Hurricanes like Ida have caused a staggering $36 billion in damage in the state, making the state’s home insurance industry more expensive than ever. If you’re looking for a way to lower your insurance rates, weatherizing your home is a good solution. Simple wind mitigation measures like trimming trees may help save a significant amount.
The cost of Florida homeowners insurance is highly correlated to the risk of natural disasters. Hurricanes such as Charley, Katrina, and Frances have caused a constant risk to Florida properties. This has led to a rise in Florida home insurance premiums. In 2011, regulators in Florida approved an 18.7% increase in insurance premiums. Despite the rising costs of insurance, there are ways to lower your premiums and keep your insurance rates low.
In addition to windstorms, Florida homeowners are exposed to sinkholes, which can cause significant damage. Standard homeowners insurance policies don’t cover this type of damage, so it’s important to consider obtaining flood insurance if you live in a high-risk area. Flood insurance policies in Florida may be required by the lender when you’re applying for a mortgage. Insurers often require homeowners to purchase a separate flood insurance policy to cover damages resulting from hurricanes.
While rising natural disasters are part of the problem, the insurance industry has a number of other factors contributing to the high cost of homeowners insurance. Construction materials and record-setting hurricanes are among the causes of price hikes, but it is not a direct cause. Excessive lawsuits and false claims are also factors in the rising cost of homeowner’s insurance. Standard Florida homeowners policies are $2,414 per year, or $201 a month.