I wish there was a single answer to this question. If there was, it might mean that there would be an easier fix. The truth is, like many fronts converging to form a perfect storm, there are a multitude of reasons why we are seeing larger than normal rate increases to Florida Insurance Rates in 2022. And it seems there is plenty of blame to go around.
I purposely will leave “perils” off of this list below because even though insurance experts say a recent increase in water damage claims has impacted many companies bottom line, increased claims are not a reason for insurance companies to whine and retort by jumping up on their premiums. These causes of loss are the exact purpose that consumers purchase insurance and it is the insurance industry’s duty and responsibility to prepare for the ebb and flow that these perils cause.
This is by no means a comprehensive list, but it does highlight some of the reasons we are seeing a trend of rising rates. If you haven’t heard, some reasons include:
- Increased Litigation
- Attorney fee multiplier
- Assignment of Benefit (AOB) Contracts
- Increased use of Public Adjusters
- Insurance companies low-balling claim payouts
- Consumers inflating damage
- Lack of repair contractors
- Unfriendly consumer policy language
- Lack of repair materials & equipment
- Repidly increasing inflation
- Insurance companies slow to respond and pay
- Company claim “procedures” and poorly trained or handcuffed Adjusters
- New contractual claim settlement alternatives that incentivize insurance company bad behavior
- Lack of availability of coverage
- New inspection requirements
It is fair to say that the recent housing boom has also added its share of challenges as well. With thousands of new homes being completed daily throughout the state, the demand for insurance has increased beyond what insurance companies had forecasted or prepared financially to be able to insure.
Naturally, increased demand, increased valuations and too little availability has created an environment where cost is not the critical issue, availability takes the lead.
Because of these reasons and many others, the Florida Property insurance market is now in a crisis. Experts are projecting that we can expect for this trend to last for at least ten years.
With the exception of “Rapid inflation”, which I will leave for the financial experts, I will continue to blog about each of these issues above. To find out more just select the link as they become available.
All of these issues emphasize why it is important that you have a knowledgeable, independent Agent you can trust. One that has many companies to choose from and puts your interest first.
Contact us for more information.
LEGAL DISCLAIMER
Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.
