TAMPA, Fla. — Florida’s insurance industry has been soured by fraud schemes and excessive litigation which has created a crisis for homeowners as they struggle to keep up with rising rates.
Now, the insurer of last resort, Citizens Property Insurance, will hike its rates beginning November 1 for new policy holders. For existing policyholders, these rates will go into effect once you renew. The rate increases were planned before Hurricane Ian destroyed thousands of homes and businesses.
When insurance rates go up people like Pat Mabe are hit hard.
“I think our costs are astronomical. So, everybody’s griping about gas because we pay for that every day, but you get these insurance bills of $10,000 to $11,000. That is significant. That is not 10 cents,” Mabe explained.
Mabe has been with Citizen’s Property Insurance on and off for about 10 years. It’s typically considered Florida’s insurer of last resort but over the past two years, Citizen’s has seen explosive growth in customers.
“We’ve been dropped by everybody, and we’ve never have had a claim. So I mean Citizens is left holding the bag by the government so I can see their side of it even though I’m very frustrated,” Mabe added.
She and other Citizens customers will see a 6.4% rate hike next week as her policy renews in November.
“I’m using a 25% off coupon. I bought stuff for the holidays. I mean, we are trying to do what we can, I mean, to make it. Because it is going up, my homeowner’s went up significantly. We’ve raised the deductible,” Mabe said.
Mark Friedlander with the Insurance Information Institute told ABC Action News that Florida’s insurance industry is in crisis, and it’s worsened by Hurricane Ian’s destruction.
“Prior to Hurricane Ian, Florida’s property insurance market was facing what we labeled as a man-made crisis, driven by roof replacement fraud schemes combined with excessive levels of litigation,” Friedlander said.
He said because of these factors, Florida homeowners are paying the highest average premium in the U.S. That’s $4,231 across the state, which is nearly triple the U.S. home premium average of $1,544.
“The average increase homeowners have seen this year in Florida is 33% versus the U.S. average of 9%. So, Floridians are already paying the highest averages in the country. And this is not related to the hurricane,” Friedlander added.
But Hurricane Ian’s devastation is being felt in more ways than one.
“We are already hearing from some consumers they are receiving insurance renewals over 100%,” Friedlander said.
Florida’s insurer of last resort is becoming the first and only option for many homeowners.
Citizens Property Insurance reached 1.1 million policies before the hurricane hit, more than doubling its share of policies since the homeowner’s crisis in Florida began several years ago.
“Over the last several months, we’re adding about 9,000 new policies a week,” Michael Peltier with Citizens Insurance said. “Our rates are based on losses that we’ve experienced in the past. Well, that’s not really affected by the policy count. You know, Citizens is doing what it’s supposed to do. It’s like when the market is healthy, our numbers go down.”
For consumers, Friedlander said you can’t negotiate your insurance rate with the company, but you can try and shop around.
“If you could bundle your coverage, meaning you get your home and auto with the same insurer, that will have significant savings, maybe 15% to 20% on each policy. Where Citizens, that’s not possible because they don’t write auto,” Friedlander said.
He suggests talking with your insurance agent as there may be discounts you’re missing out on.
“If you have insurance with a private insurer, they offer many types of discounts, including a claim-free discount very often if you’ve never filed a claim, a loyalty discount meaning you have been a customer for a long period,” Friedlander explained.
As for Mabe, she’s doing what she can to keep up with the price of paradise.
“Well, you just, you cut. You eat beans and rice and a little more lettuce. Healthy, you know, you just have to cut, because you can’t live in Florida without insurance,” Mabe said.
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