No one, it seems, has a longer memory than a homeowners insurance company. Florida has not suffered a hurricane since 2005, but insurance companies, particularly Citizens Property Insurance Corp., continue to increase premiums as if Dennis, Katrina and Wilma were planning a comeback. “For the first time on the same stage, ladies and gentlemen ….”
According to the National Association of Insurance Commissioners, Florida posted the highest homeowners premiums in the U.S. in 2013 (the most recent data available). At an average $2,115 per year, premiums rose about 2 percent over 2012. Premiums were significantly higher here than in the second highest state (Texas, $1,837) as well as the national average ($1,096).
The reason for the high rates is difficult to pin down. One consumer advocacy group remarked that these premium rate hikes are unjustified. Worse, coverage has declined — and not just from year to year, but from state to state. Florida has much more expensive insurance than neighboring states, but their policies buy them more coverage.
Insurance companies point to “abuses” by plaintiffs’ attorneys, adding that inflated invoices and assignment of benefit scams from contractors are also driving premiums up. Attorneys and contractors disagree.
The Insurance Information Institute offers yet another explanation. Florida may not be the hurricane magnet it once was, but our homeowners still incur substantial losses from other types of catastrophes. From 1985 to 2014, Florida reported $68 billion in insured losses, almost 14 percent of the national total. Texas again came in second, with $51.3 billion in insured losses over the same period.
What’s interesting about the III data is that Florida does not appear among the top five states for any year from 2008 to 2014. That the state ranks first for 1985 to 2014 may speak volumes about the devastation caused by the 2005 hurricane season and Hurricane Andrew in 1992.
For consumers, the reason may not matter — aside from the scams, of course — as much as the fact that they are paying more for less. Year after year.
Source: Palm Beach Post, “Florida stews under costliest U.S. insurance despite 10-yr. storm lull,” Charles Elmore, Feb. 26, 2016Share