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Where do we stand as a Florida Homeowner's Insurance Market?

Updated: Apr 27, 2022

If you have been a homeowner in Florida chances are you might have seen many changes taking place in the last couple of years when it comes to your homeowner's insurance. You might even wonder why premiums are increasing and if it is going to get better any time soon. I am going to share some information that may shed some light into the situation. The Insurance Information Institute shared an analysis stating that the average homeowners’ insurance premium in the U.S. last year was $1,398, up 4%. In Florida the increase in 25% to $3,600. The main reasons why this is happening is because of legislation specific to Florida property insurance and a rising rate of insurance fraud. Here is are some numbers to consider from some statistics just a few years back:

Reforms where excepted to take place this year but unfortunately they did not. Bills presented to alleviate the situation did not pass during the 2022 Florida Legislative session. This took place from January 11 until March 14 to much disappointment. At least two Florida Senators called for a special legislative session to focus on Florida’s property insurance crisis after three bills failed to pass. Meanwhile, Florida Citizens exposure continues to grow, with 801,341 active policies as of this week. It is expected to reach 1 million policies before the end of 2022. Regarding this issue Citizens’ board member Scott Thomas said “Until we get some legislative relief … we are stuck chasing our tails”. Just this month Avatar Property & Casualty Insurance Company was ordered into receivership and St. Johns Insurance Company is now insolvent and will soon be liquidated. St. John’s Insurance was the eighth largest in the state, with around 160,000 policyholders. As of this moment if nothing is done the only expected outcome is for more insurance companies to be forced to closed, Citizens will continue to acquire more policies, and premiums will continue to increase. Joseph L. Petrelli, the president for Demotech's, a rating agency, recently wrote a letter to Governor Ron DeSantis calling for urgent legislative reforms, informing him that a number of carriers are facing downgrades in the coming weeks. Downgrades usually take place when a company is at the verge of shutting down. He explained that without reform, Florida’s property insurance market is heading toward greater problems. I feel that as residents of Florida it is important for us to understand what is taking place. Cases are being seen were elderly homeowners, on fixed incomes, are now living in fear that they will not be able to keep their homes. Something must be done in order for this not to continue.

update: It appears that no Florida Special Session will be taking place but the Office of Insurance regulation is stepping in:

updated 04/27/2022: New sessions has been declared for May.

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