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Berlin & Denys Insurance Blog

Why Did My Homeowners Insurance Go Up?

7/21/2022

7 Comments

 
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​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.
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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.
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​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.
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7 Comments
Jan DelRussi link
9/28/2022 11:49:17 am

Thank you for sending this

Reply
Pool Removal Elgin link
3/15/2023 01:06:47 am

I also notice this one. Thanks for sharing this information!

Reply
susan Romanello
5/23/2023 08:30:20 am

I have homeowners insurance with Berlin and Denys - Charity, Shannyn and Dawn have been amazing in helping me with my needs. Definitely give them a call before you call anyone else as they are very competitive.

Reply
Homeowner Insurance Massachusetts link
9/29/2023 04:50:38 am

The rise in homeowners insurance costs in Florida is certainly concerning. Insurance fraud seems to be a significant factor driving these increases. It's essential for homeowners to be vigilant and cautious when approached by roofers offering "free" services. Understanding the terms of your insurance policy is crucial to avoid unnecessary claims and potential rate hikes. Stay informed and protect your investment.




Reply
Surrey Insurance link
10/23/2023 11:24:15 pm

It's disheartening to see homeowners insurance skyrocket in Florida due to a perfect storm of factors. Insurance fraud, rampant litigation, and rising reinsurance costs are pushing premiums to alarming heights. The legislature's efforts with SB 76 and SB 2 are steps in the right direction, but change takes time. Meanwhile, vigilance is key—avoid signing Assignment of Benefits forms without consulting your agent, consider protective measures like hurricane shutters, and regularly review policy coverages. In this turbulent market, staying informed and proactive is the best defense against soaring insurance rates. At Berlin & Denys, we're committed to navigating these challenges with you.

Reply
Emerald link
1/24/2024 05:21:32 am

Amazing write-up! This content has helped me to stop my <a href="https://www.tecng.com/commercial-property-insurance/">search</a> on the net. the content is filled with the vital information I need, you can as well check back at my <a href="https://www.tecng.com/">website</a>

Reply
Adam Chahl link
8/23/2024 02:57:32 am

Understanding the factors driving up insurance costs – like insurance fraud, litigation, and reinsurance rates – helps me set realistic expectations for buyers and sellers. It's also an opportunity to emphasize the importance of wind mitigation inspections and other preventative measures that can help lower premiums. Ultimately, my goal is to guide my clients through the complexities of the insurance market, ensuring they make informed decisions and find the best coverage for their needs.

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