Why Did My Homeowners Insurance Go Up?

​Did you notice your homeowners insurance going up this year?  If so, you aren’t the only one: far from it.  As you may or may not know, Florida’s property insurance market is in a crisis.  Over the last 3 years, the average cost for insurance has increased from $1,989 to $3,585, which is a 55% increase.  Furthermore, many insurance companies have either gone out of business, pulled out of Florida, or restricted the types of homes they are willing to insure.  What’s causing this market turbulence?  A few things, it turns out.

Insurance Fraud: Many people have had roofers knock on their door recently promising a free inspection of their roof.  Certain unscrupulous roofers promise homeowners “free” roofs paid for by their insurance company.  It is important to note that your homeowner policy is not a warranty for your roof.  If your roof is old and naturally needs to be replaced, that is your responsibility as a homeowner.  Your insurance company pays to replace your roof if it is damaged by a covered event, like a hurricane for example.  The way this fraud works is that the homeowner is told to sign an Assignment of Benefits form, which ‘assigns’ the benefits of their policy, and most crucially, the right to file a lawsuit, to the roofer.  This allows the roofer to file a claim to the insurance company for a new roof regardless of whether the damage was caused by a covered event.  When the insurance company denies the claim for normal wear and tear damage, the roofer sues.

Rampant Litigation: In the past year, over 100,000 property insurance lawsuits were filed in Florida.  While Florida only generates 9% of the nation’s property insurance claims, it generates an astronomical 79% of the nation’s property insurance lawsuits.  So, what’s going on here?  After the roofer sues the insurance company for denying their claim, the insurance company often decides to settle the case and just pay to replace the roof.  The cost of litigation is often more than it would cost to simply pay the claim.  It’s estimated that $800 of every property insurance policy goes toward the cost of litigation. 

​Reinsurance: Reinsurance is coverage insurance companies must purchase to help them pay claims in the event of a catastrophe (like a hurricane).  Recent hurricanes and disasters have sent the price of reinsurance up, which is inevitably passed down onto policy holders.

​What can you do?  It’s obvious that Florida’s property insurance market has some issues.  In both 2021 and 2022, the FL Legislature passed two bills, SB 76, and SB2 respectively to help mitigate the crisis.  It takes time though for these changes to percolate throughout the industry.  In the meantime, you should avoid signing an Assignment of Benefits form until you have a conversation with your insurance agent.  Installing hurricane shutters, or completing a wind mitigation inspection can help to reduce your rates.  But most importantly, you should review your policy coverages each year.  Our agency, Berlin & Denys has access to dozens of financially sound property insurance companies. 
For a free quote, reach out to our Property & Casualty Division at (386) 308-3268 or click below.

request a quote on our website