TAMPA, Fla. — The cost of living here in paradise has increased dramatically since the pandemic began. Hundreds of thousands of people are moving to Tampa Bay, and home prices are rising faster here than in California and New York, according to Case-Shiller Home Price Index.
But there’s another cost of owning a home that’s gotten worse over the years here in Florida: that’s insurance.
Seven Florida property insurance companies are now in liquidation and many residents are seeing their bills nearly triple from two years ago.
Most residents with homes under $650,000 have what is called state-subsidized citizens’ property insurance as a “last resort.”
Hudson resident Elizabeth Roache’s annual bonus with Citizens was $769 in 2019. It rose to $1,500 last year, and this year it’s $1,932.
“That’s almost three times more than two years ago,” exclaimed Roach. “And it really makes you wonder, okay, what’s going on here?”
According to insurance.com, the average cost of homeowners insurance in Florida for a $300,000 home is $3,600, about $1,300 more than the national average.
We reached out to veteran insurance agent Kathy Walsh, owner of Coast to Coast Insurance in Tampa, for answers.
“The reason is due to all the frauds we have seen in Florida. There is an organized undercurrent of roofers, public surveyors, lawyers, and salesmen who criss-cross the neighborhoods. About the roof of your house, even if it’s at the end of its life, even if it’s a 24-year-old roof and it’s only good for 20 years, “we can have a new roof installed by your insurance company,” she said. Explain.
This is exactly what is happening in one neighborhood of Seminole Heights.
“I turned around, I looked between our houses, and there was a ladder against my roof and it was a guy about to get on the roof, and I said, “Hey, what the hell? what you do ?!” exclaimed owner Brian. Curry.
He and neighbor Rebecca Williams say roofing companies are constantly knocking on doors in their neighborhood with homes built in the 1920s.
“They knocked on my door. “Oh, we can tell you need a new roof.” I said ‘Really? How can you say you didn’t even participate? said Williams. “Well, you know, we go around the neighborhood. And I said ‘Sure, you can go on my roof… It became such a hard press like, ‘Do you want to do this? Do you want to do it?'”
Even after saying no, Williams received a voicemail from the man saying, “I just wanted to see if you were ready to get the ball rolling on your new roof, call me back ASAP.”
With her roof nearing the end of its life, Williams said she was too afraid to have it replaced for fear her home insurance would go up.
Walsh said these companies require the homeowner to sign an assignment of benefits, or AOB, allowing the roofer to deal directly with the insurance company, often claiming storm damage and ending up in court.
“Florida accounts for 10% of all insurance claims nationwide,” Walsh said, “but we are at 76% of lawsuits nationwide.
According to Guy Carpenter Industry Reporting, property insurers recorded underwriting losses of $1.22 billion from January to September 2021 – that’s money lost on top of claims payments.
Since the last week of March, seven agencies in Florida have gone into liquidation:
- American Capital Assurance Corporation
- Avatar P&C Insurance Company
- Florida Specialty Insurance Company
- Gulfstream Property and Casualty Insurance Company
- Sawgrass Mutual Insurance Company
- St. John’s Insurance Company
- Sunshine State Insurance Company
Lexington Insurance also joined the list of companies pulling out of the Florida market and those still hanging on – like Flagship Property and Florida Farm Bureau both saw their financial ratings plummet due to losses.
In February, Tampa Bay Senator Jeffery Brandes tweeted about the rapidly developing problem.
Walsh said it was crucial that Florida pass cash value legislation roof replacement.
“Mortgage lenders and mortgage requirements have demanded, especially if it’s government subsidized loans, that they be 100% replacement cost on the roof,” she said. “You have to go to the actual cash value, where it’s a five-year, 10-year, 15, 20-year depreciation of the roof, it has to be a depreciation schedule.”
HB 7065 which would have limited certain annual rate increases as part of citizens’ property insurance and promoted more money-value roof replacements died in the state House of Representatives when the last session ended in March.
The burden is heavy on citizens, especially if major storms hit Florida this hurricane season. The Florida Office of Insurance Regulation held a hearing Thursday, March 31, to hear a Citizens’ Proposal on a rate hike of nearly 11%, the largest increase allowed by law. They have not yet announced their decision.
We contacted Governor Ron DeSantis’ office to ask what they are doing now.
His deputy press secretary Bryan Griffin responded by saying, “The Governor is monitoring the stability of the insurance market in real time and is working closely with Commissioner Altmaier (Office of Insurance Regulation) to find solutions to rising insurance costs.
In July 2021, DeSantis signed SB 76prohibiting contractors to solicit a consumer to repair their roof through an insurance claim and to offer roof inspections. It could take about two years to see its effects.
Governor DeSantis called for a special session in April to redesign the congressional district, it won’t be for property insurance.
Under Florida law, the President of the Senate and the Speaker of the House of Representatives can also issue a joint proclamation summoning the Legislative Assembly. Another option is for 20% of lawmakers to request a session and three-fifths of both houses to approve and set the date.
Tips for saving on home insurance:
Full statement from Governor Ron DeSantis’ office:
“Governor DeSantis remains committed to the goal of stabilizing insurance rates and continuing to work for the consumer. The Governor is monitoring the stability of the insurance market in real time and working closely with Commissioner Altmaier to finding solutions to rising insurance costs.
In 2019, 8.6% of all property insurance claims in the United States were filed in Florida, but 76.45% of all property insurance disputes in the United States occurred in Florida.
Recognizing this, in the 2021 legislative session, the Legislature passed and Governor DeSantis signed Senate SB 76 which significantly reformed the litigation environment in Florida by changing the way attorney fees are awarded in contested insurance cases. At the time, it was stated that it would potentially take two years to feel the impact of this bill, as ongoing litigation does not fall under the amended law, nor do insurance claims for a loss that preceded the effective date of the bill. Many insurance companies in Florida are still grappling with tailings litigation from recent hurricanes, including Hurricane Irma. But as a result of the reforms we have implemented so far, we are seeing new companies come to market.
The Governor has consistently urged the legislature to enact substantial insurance reform. In addition to pushing for attorney fee reform in SB 76, in 2019, Governor DeSantis pushed for Assignment of Benefits (AOB) application reform and signed into law HB 7065. He also appointed more than 100 justices and 5 Supreme Court Justices who have a significant impact in reducing frivolous litigation.
Finally, it should be noted that Biden-induced inflation is hurting consumers around the world and driving up the prices of consumer goods such as home building materials. If it costs more to repair or replace a house, insurance prices will go up. Governor will continue to work to protect Floridians from bad choices made in Washington DC
We continue to work with the Office of Insurance Regulation to monitor market stability.”
Car insurance is another big concern for residents browsing the Price of Paradise.
Experian said inflation rates affect auto insurance across the country. In fact, the worst they’ve seen in 40 years.
“It’s been a long time since we’ve seen this kind of cost increase, and it affects everything: spare parts for cars, the cost of new cars, replacement cars, insurance companies are going to have to take charge those costs and pass them on to you,” explained Rod Griffin of Experian.
Experian has created a new online tool to help people compare insurance rates with 40 of the best suppliers in the country. They say it helps people save around $900 a year.
Tips for saving on car insurance:
- Ask your insurance about student discounts for good grades
- If you have a smartphone, some insurance companies offer tracking for good driving discounts
- Improve your credit score