Over these last couple of months, many of our clients have called with questions about why Florida’s property insurance rates are increasing so dramatically. We want to share some insights on the matter and how you can get involved –
- Cost of building materials is going up – this has to be taken into consideration when it comes to repairing your property.
- Cost of labor has also increased. Due to the cost of ‘doing business’, the average business has found it necessary to pass those increased costs to the consumer.
- There are frivolous lawsuits being filed by trial attorneys with fee multipliers equal to 2-3 times the hourly rate for an average attorney. They can earn six-figure fees on a $10K settlement–none of which is shared with the policyholder.
Here is some information on property rate increases in Florida:
Thousands of claims are being reported with roof damage that appears to be general wear-and-tear or maintenance-related as opposed to damage with causes covered by peril insurance (including fire, lightning, windstorms, etc.). Costs are rising due to lawsuits being filed for damages caused by a hurricane that made landfall three years ago.
Roofers and Construction companies are having property owners sign ‘Assignment of Benefits’ (AOB) forms in estimates that transfers the insurance claims rights or benefits of the policy to a third party. An AOB gives the third-party authority to file a claim, make repair decisions, and collect insurance payments without the involvement of the property owner.
AOBs have long been a part of Florida’s insurance marketplace. However, abuses in the way they were being used in the marketplace have driven up costs for property insurance across the state due to unnecessary litigation associated with certain AOB claims.
Consumers should be aware, when signing an AOB, that they may become involved in the third-party vendor’s lawsuit against the insurance company if the third party and the company are in dispute on the payment amount of the claim.
You can visit the Florida Office of Insurance Regulation website for more information – https://www.floir.com/Sections/PandC/AssignmentofBenefits.aspx
The implications of the above have many businesses and property owners calling for reform. Some of the most sought-after changes include ending fee multipliers for lawyers who are receiving egregious paydays from run-of-the-mill lawsuits, adding additional, affordable options for roof coverage for consumers, and reducing the statute of limitations for filing claims–meaning damage should be reported immediately, not 3-5 years after it occurs.
Fortunately, there are actions we can take as citizens to try and combat these rate increases. Here are some simple ways you can make an impact:
- Reach out to your legislators today and let them know how much your premium has increased this year!
- Encourage their support of legislation that aims to achieve the much-needed reforms.
- Follow theFloridians for Lawsuit Reform Advocacy Groupand sign the petition to make your voice heard.
- Tell your family and friends about the cause–if they live in Florida, their premiums are also going up.
If our state does not act on the legal issues mentioned, your property insurance rates will continue to increase. Getting involved only takes a couple of minutes of your time–and the impacts are far-reaching for all property owners across Florida.
IF you want to see about reducing your Homeowners costs, you can – 1 – obtain a Four Point Inspection – these are reports that give information on your roof, electrical, plumbing and HVAC. These inspections give the Insurance Company an unbiased professional report on the condition of your house. 2 – obtain a Wind Mitigation Inspection – a certified inspector checks your home’s wind-resistant features. These can be anything from door/window coverings to your roof. 3 – replace your roof – although you may have a 20 – 30 year warranty on your shingles, the average life expectancy is 15-20 years in Florida. A Tile or metal roof may last from 25 – 50 years. 4 – up-grade older electrical breaker panels, aluminum wiring, cast iron plumbing or older HVAC units.
IF you want to see about reducing your Commercial Property Insurance costs, you can – 1 – obtain a Commercial Property Inspection – these are reports that give information on your roof, electrical, plumbing and HVAC. These inspections give the Insurance Company an unbiased professional report on the condition of your property. 2 – replace your roof – although you may have a 20 – 30 year warranty on your shingles, the average life expectancy is 15-20 years in Florida. A Tile or metal roof may last from 25 – 50 years. 3 – up-grade older electrical breaker panels, aluminum wiring, cast iron plumbing or older HVAC units. 4 – install burglar/fire safety equipment – central station alarm systems for burglary and fire are important
If you have any questions or concerns about your property insurance renewal rate, please don’t hesitate to contact us. BUT be thankful that you are being offered a renewal as many Insurance Companies are non-renewing policies across Florida or changing the terms of coverage. We represent many of the Property Insurance Companies in the state of Florida. Most are generally in the same ‘ballpark’ as to price and terms – some Companies are NOT writing any new Property Insurance at all at this time due to the current legal environment. But we will attempt to be of help – maybe we can ‘bundle’ your Home and Auto or place your Commercial Property in a Package Policy to save you some premium.
Contact one of our Agents for more information –