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Big homeowners insurance increases, policy cancellations and insurance companies going under are forcing many Floridians to look for new homeowners insurance. Florida home insurance has become such a particular pain point that the state legislature is holding a special session to try to find solutions.
Here we look at current Florida home insurance rates, major problems and the state’s history of declared disasters.
Cheap Florida Homeowners Insurance Cost Comparison
Here’s an overview of rates from many of Florida’s largest home insurance companies.
Average home insurance rates by company for $150,000 dwelling coverage
Average home insurance rates by company for $300,000 dwelling coverage
Average home insurance rates by company for $500,000 dwelling coverage
Average home insurance rates by company for $1 million dwelling coverage
Related: Best home insurance companies
Florida Home Insurance Has ‘Degenerated Into a Racket’
Florida’s population is heading for 22 million and it accounts for just 8% of property claims nationwide. But Florida has more than three-quarters of all property claims lawsuits, many of which lawmakers say are frivolous.
Florida home insurance companies often face a no-win situation when they fight an insurance claim in court, thanks to the state’s Assignment of Benefits (AOB) law. AOB allows a homeowner to turn his or her claim over to a contractor instead of dealing with the insurer. The contractor can then hire an attorney, often before talking to the insurance company.
Florida law states that if the lawyer wins a dollar more than the insurer offered, the insurer must not only pay the claim—which the contractor may have inflated—but also all legal costs, which could be thousands of dollars for a claim that might have originally been a few hundred. In one case cited by State Rep. Bob Rommel, the homeowner received $35,000; the attorney got $756,000.
Florida Gov. Ron DeSantis has said that the state’s AOB system “has really degenerated into a racket.”
Florida Roofs Are a Central Pain Point
Roofing contractors are aggressive in contacting Florida homeowners who may—or may not—have actual roof damage. They can be so aggressive that they put flyers on every doorknob in many neighborhoods, while offering $500 gift cards. The situation became so bad that the state legislature passed a law, signed by Gov. DeSantis, restricting contractors from using “prohibited advertisements” to encourage homeowners to let them file insurance claims for roof damage.
But a federal judge slapped an injunction on the law when a roofing contractor said it violated his First Amendment right to free speech. And other roofing contractors subsequently joined the lawsuit, which hasn’t yet been decided.
One major complaint is that insurers are trying to ward off the threat of having to pay for new roofs by rejecting customers who have asphalt shingle roofs that are more than 10 years old.
The legal hammering the state is taking could make things even worse. “Florida’s insurance market is spiraling toward collapse,” says a report commissioned by the Florida Senate’s Banking and Insurance Committee.
Latest Florida Homeowners Insurance Developments
Aug. 8, 2022: Weston Property and Casualty Insurance became the fifth homeowners insurance company serving Florida to go out of business this year.
The Florida Office of Insurance Regulation referred the insurance company to receivership last week. Demotech, a rating agency, also withdrew Weston Property and Casualty Insurance’s rating from “A” exceptional to “NR” no rating.
July 25, 2022: Bankers Insurance is the latest homeowners insurance company to say it’s dropping some policies in the Sunshine State. The company is blaming the state for not properly tackling the Florida’s teetering home insurance market.
The legislature held a special session to address the home insurance issues in May, including a $2 billion reinsurance program, deductibles for roof insurance claims, limiting legal costs in homeowners insurance lawsuits and provisions to help homeowners. Bankers Insurance doesn’t think the legislation went far enough to help homeowners insurance companies with fraud and litigation.
Bankers Insurance Group’s decision is expected to affect about 25,000 policyholders. Despite dropping homeowners and dwelling fire coverage, the company expects to continue to provide commercial property insurance, flood insurance, builders risk insurance and renters insurance in Florida.
July 22, 2022: Seventeen property insurance companies will have their Financial Stability Ratings downgraded by Demotech, the Florida insurance rating agency, according to the Florida Office of Insurance Regulation.
The move comes following a review of 2022 hurricane season reinsurance. Demotech reportedly informed insurers about downgrades from A (Exceptional) to S (Substantial) or M (Moderate).
The ratings allow insurance companies to operate in Florida. If insurers lose their A or better ratings, policyholders with mortgages may have to look for new home insurance companies. Mortgage lenders sometimes require home insurance from a highly rated company.
July 14, 2022: Citizens Property Insurance Corp., the state’s insurer of last resort, has canceled homeowners insurance policies on houses that would cost more than $700,000 to replace.
As building costs and property values have skyrocketed, Citizens reportedly dropped 2,267 policies with replacement value of over $700,000 over the past year. All but two counties in Florida cap homeowners coverage at $700,000.
June 25, 2022: The Florida Office of Insurance Regulation approved an average 6.4% rate increase for Citizens Property Insurance Corp.’s multi-peril homeowners insurance policies.
The state-run insurance company had previously proposed a 10.7% increase, but the state granted a 6.4% average rate hike instead. Other Citizens Property Insurance customers will see increases of 8.4% to 11%.
Citizens, Florida’ s state-run insurer of last resort, has seen its number of policies skyrocket over the past year as homeowners insurance companies have left the state, increased rates or gone out of business. Citizens now has nearly 900,000 members, which is more than double its membership compared to less than three years ago.
June 24, 2022: Florida homeowners will pay more than triple what the average American pays for home insurance in 2022, according to the Insurance Information Institute.
Sean Kevelighan, CEO of the Insurance Information Institute, says hurricanes aren’t to blame for the higher rates, but instead points to “too much litigation and too many fraudulent roof replacement schemes.”
Florida homeowners will pay an average of $4,231 for home insurance in 2022, compared to $1,544 for the average U.S. homeowner, says the Insurance Information Institute.
June 15, 2022: Southern Fidelity Insurance Co. was officially described as “insolvent” by the Florida Department of Financial Services. The department filed a receivership petition. Current Southern Fidelity customers have 30 days to find new insurers. Many customers will likely end up with Citizens.
Southern Fidelity has about 78,000 policies in Florida and 69,000 in Louisiana, Mississippi and South Carolina.
June 7, 2022: The Florida insurance department ordered Southern Fidelity to make a plan to wind down. The company previously said it could not get sufficient reinsurance.
June 6, 2022: Credit rating agency AM Best believes the Florida homeowners insurance market will continue to face financial problems despite the recent legislation tackling home insurance reforms.
In a new commentary, AM Best pointed to the $2 billion reinsurance program aimed at helping struggling insurers as not enough. AM Best said reinsurance companies have been leery about helping Florida insurance companies and that reinsurance won’t offer insurers relief for “secondary perils,” such as non-hurricane storms.
Some of the other legislative reforms may help homeowners, but AM Best warned that relief won’t be immediate.
June 1, 2022: The state is warning consumers about contractor solicitation schemes and assignment of benefits (AOB) abuse. An AOB is a document that lets a third party, such as a roof contractor, seek payment directly from a homeowners insurance company.
AOB abuse is one reason why Florida home insurance costs have skyrocketed and forced insurers to leave the state or go out of business.
Florida’s CFO Jimmy Patronis recommends avoiding contractors and restoration professionals who waive or discount an insurance deductible or offer to make repairs at a cash-only discounted rate but don’t make repairs.
Patronis said homeowners should check a contractor’s license and shouldn’t sign anything. Instead, the state CFO suggests homeowners should contact your insurance company or the Insurance Consumer Helpline at 1-877-MY-FL-CFO before signing anything, such as an AOB.
May 31, 2022: Two more Florida home insurance companies are making changes to their offerings as hurricane season kicks off on June 1:
- People’s Trust said it will stop selling new Florida home insurance policies and dwelling-fire policies.
- Southern Fidelity said it is stopping new policies and renewals until it can get reinsurance dollars from the state.
Last week, the House and Senate approved a legislative package that includes a $2 billion reinsurance program to help homeowners insurance companies.
May 27, 2022: Gov. Ron DeSantis signed the homeowners insurance reform package approved by the House and Senate.
The bills, approved in a special session, will:
- Allow for deductibles for roof insurance claims
- Prohibit insurance companies from denying coverage for a home with a roof less than 15 years old
- Prohibit insurers from automatically declining homeowners insurance for houses with older roofs.
The legislation also creates a $2 billion reinsurance program to help struggling home insurance companies, sets up money to help Floridians stormproof their residences and limits legal costs involving homeowners insurance lawsuits.
The legislation is meant to stabilize the Florida homeowners insurance market, but critics say it won’t have any real impact on reducing insurance costs.
In addition to the homeowners insurance reforms, the Florida legislature approved a bill that would require older high-rise condos to have safety inspections every 10 years.
May 26, 2022: The Florida Senate and House approved a legislative package to target issues in the state’s struggling homeowners insurance market. The bills are now headed to Gov. Ron DeSantis’ desk for his signature.
May 23, 2022: Florida lawmakers are holding a special session this week to tackle skyrocketing homeowners insurance premiums and multiple insurers leaving the state or going out of business. Legislators will discuss measures including roof coverage reforms, trial attorney fee changes and a $2 billion reinsurance fund to help insurers overcome another potentially above-average hurricane season.
May 18, 2022: Three Florida home insurance companies requested large rate hikes during virtual hearings with the state Office of Insurance Regulation. Florida Farm Bureau is seeking a 48.7% hike, Kin Interinsurance wants a 25.1% increase and First Floridian Auto and Home suggests a 23% increase. The office will review and decide on the requests in the coming weeks.
As part of a financial restructuring plan, FedNet and its affiliated companies, Maison Insurance Co. and Monarch National Insurance, have come to an agreement that will cancel nearly 70,000 homeowners insurance policies in Florida. The move will drop coverage for almost half of its Florida policies as home insurers in the state struggle with skyrocketing costs. Floridians losing coverage have 45 days to find a new homeowners insurance company.
May 10, 2022: State-run insurer of last resort Citizens Property Insurance Corp. says its number of home insurance policies has skyrocketed to 851,006 as of April 30. That’s a 44.5% increase in a year. In April alone, Citizens added 33,080 policies, as Floridians seek new coverage as home insurers have left the state and increased rates. Citizens now has the most policies since 2014 and the total is expected to exceed 1 million by the end of the year.
In April, Citizens requested a 11% rate hike, which is the highest increase allowed by law.
May 9, 2022: Heritage Insurance Holdings is cutting its number of homeowners insurance policies in the Sunshine State. The Tampa-based insurance company has reduced its Florida home policies by 19.1%.
During a recent company earnings call, Heritage CFO Kirk Howard Lusk discussed the state’s “very difficult” home insurance environment and CEO Ernesto Garateix said severe weather in the first quarter led to doubling weather losses compared to the previous year. In response to home insurance issues in the state, Heritage increased its homeowners insurance rates by an average of 21% on homeowners insurance renewals this year.
May 3, 2022: Insurance company Lighthouse is being liquidated and its 27,000 home insurance policies in Florida will be canceled within 30 days. The Florida Insurance Guaranty Association, which handles claims of insolvent insurers, says it will help pay outstanding claims of Lighthouse customers. Lighthouse is the third home insurance company in Florida to become insolvent since February.
May 2, 2022: Gov. Ron DeSantis has officially called a special legislative session to consider legislation about property insurance. The special session will run May 23-27. The legislature’s regular session ended in May without addressing the home insurance issue in Florida. Insurance fraud, rising premiums and departing insurers have led to Floridians losing coverage and going on the state-run Citizens Property Insurance. DeSantis says the state’s insurer of last resort saw its policies increase by nearly 400,000 since the beginning of 2020 and may exceed 1 million policies by the end of 2022. The governor adds that it’s especially vital to stabilize the insurance market with hurricane season officially blowing in next month.
April 26, 2022: Condo associations in Florida are struggling with higher HOA insurance costs. Insurers are concerned about Florida’s aging condo buildings following the partial collapse of Champlain Towers South in Surfside that killed 98 people last year. In response to the issue, insurers have raised condo insurance rates, offered less coverage or left the state. The Insurance Information Institute estimates that condo association insurance premiums have skyrocketed by 30% to 50%. Some associations are even paying twice as much for their HOA insurance in 2022. Those costs get passed onto condo owners in the associations.
April 19, 2022: Gov. Ron DeSantis will call a legislative special session to tackle the issue of skyrocketing home insurance costs. DeSantis said he wants to “bring some sanity and stabilize and have a functioning market.” He is expected to sign a proclamation with the special session dates this week. The May session will mainly look to “reform” home insurance, but may include other areas, too.
April 5, 2022: The state-run insurer of last resort, Citizens Property Insurance Corp., is proposing an 11% rate hike. That’s the highest that Citizens can increase rates by law. Citizens says private insurers have raised rates more than that. Citizens has almost 800,000 policies now and has been adding about 32,000 policies per month.
April 2, 2022: Florida House Speaker Chris Sprowls (R-Palm Harbor) said insurance reform isn’t on the agenda of a special session this month. Instead, only redistricting will be discussed during the special session.
March 31, 2022: Citizens Property Insurance Corp. said more policies, litigation and a “weak private insurance market” means the company needs to look for ways to cut costs and raise revenues. It has posted underwriting losses since 2015, but has $6.5 billion in reserves. The insurer of last resort said it posted net income of $81.1 million in 2021, but had an underwriting loss of $166.5 million.
March 14, 2022: Avatar Property & Casualty Insurance Co. is being liquidated under a consent order. That leaves 37,000 policyholders looking for new coverage by April 13 and may swell Citizens Property Insurance Corp.’s customer base.
March 4, 2022: St. Johns Insurance Co. is being liquidated and all policies in Florida are canceled. Slide Insurance Co. is offering coverage to St. Johns’ 150,000 former members. St. Johns is the latest Florida home insurance company to fall into liquidation as insurers blame lawsuits and fraud for causing serious problems in the Sunshine State.
Other Florida insurers that recently went into liquidation include American Capital Assurance Corp., Florida Specialty Insurance Co., Guarantee Insurance Co., Gulfstream Property and Casualty Insurance Co., Sawgrass Mutual Insurance Co., Sunshine State Insurance Co. and Windhaven Insurance Co.
Feb. 15, 2022: St. Johns Insurance and Lighthouse said they aren’t writing new policies in Florida.
Other Florida home insurance companies that said earlier this year that they are not writing new policies or didn’t plan to renew Floridians’ policies include United Property & Casualty, TypTap and Florida Farm Bureau.
Progressive says it won’t renew home insurance policies for houses with shingle roofs that are 16 years old or older. This will affect about 56,000 Progressive policyholders.
What to do if Your Florida Homeowners Insurance Company Goes Out of Business
Thousands of Floridians have had to scramble to find new homeowners insurance after their insurers were liquidated, went out of business or simply stopped selling policies in the state.
The state’s Chief Financial Officer Jimmy Patronis lists 13 Florida insurers in liquidation—and that doesn’t include the insurance companies that simply closed up shop in the state.
The Florida Insurance Guaranty Association (FIGA) is the state program that temporarily handles payments and claims involving insolvent property and casualty insurance companies. Here’s what happens if your insurance company becomes insolvent and files for bankruptcy.
- A state court enters an order of liquidation.
- The Florida Insurance Guaranty Association takes over the claims for the company.
- Policyholders make their due payments to the association and look for a new insurance company.
- The association handles outstanding claims involving the insolvent company prior to liquidation or within 30 days after the liquidation order unless the policyholder replaces the policy before the 30 days end. The association pays covered claims between $101 and less than $300,000.
- FIGA also refunds unearned premiums. For instance, if you paid up your insurance for the year, but your policy ends because of the liquidation.
How to file a homeowners insurance with the Florida Insurance Guaranty Association
What happens if your homeowners insurance company enters into liquidation within days of a fire damaging your home? Here’s how to file a claim with the Florida Insurance Guaranty Association.
- Write, email, fax or call FIGA about making a homeowners insurance claim.
- The association will want to know your insurance policy number and date of loss.
- FIGA will create a claim number, which you should keep handy to use during the claims process.
- FIGA will assign an adjuster to handle the claim and review damage.
- The association will process the homeowners insurance claim and offer payment for the damage.
Homeowners Insurance Cost Factors
Several factors can determine your ability to obtain cheap home insurance in Florida, including:
- The age of the home
- The materials your home is made of
- The cost to rebuild the home
- The fire rating of your location
- The claims history of your location
- Your personal claims history
- Coverage limits and deductibles
- Your credit
Related: Cheapest Homeowners Insurance Companies Of 2022
What Does Homeowners Insurance Cover?
A standard home insurance policy (designated as HO-3) covers your house for any mishap that’s not excluded in the policy. Common exclusions include sinkholes, power failure, neglect or wear and tear, nuclear hazard, vermin and insect infestations and intentional damage.
Your personal property is covered for specific identified “perils” in a standard home insurance policy. Theft, vandalism, tornadoes, fire or lightning and smoke are just some of the problems covered by home insurance.
A standard home insurance policy is composed of these main coverage types:
- Dwelling: This portion of the policy pays to repair or rebuild your home if it’s damaged. It also covers attached structures, such as a deck or garage.
- Other structures: This pays to repair or replace structures that aren’t attached to your home, like a fence, shed or in-ground swimming pool.
- Personal property: This pays to repair or replace your belongings after an event like fire or theft. Your personal property includes articles such as your clothes, jewelry, furniture, appliances, rugs and other household items.
- Liability: This pays for property damage and injuries you or other household members accidentally do to others. For instance, if you let your dog out without a leash and it bites a person walking by, your liability insurance may pay either a settlement or court judgment against you—and legal defense costs—if the person files a lawsuit.
- Medical payments to others: This covers minor medical claims made by someone not in your household, no matter who was at fault for the injury. For example, if a friend trips on loose carpet and sprains their ankle, medical payments coverage could pay for medical care they receive. Coverage amounts are generally small, such as $1,000.
- Additional living expenses: If you’re unable to live in your home due to an event covered by your policy (like a fire or tornado), additional living expenses coverage can compensate you for money spent on restaurant meals, hotel rooms and other necessary services, such as a pet boarding facility.
Related: How much home insurance do you need?
What’s Not Covered by Homeowners Insurance?
Common exclusions found in a standard Florida home insurance policy include events like power failure, floods, earth movement (sinkholes, mudslides, mudflows, earthquakes), neglect, wear and tear, bird, vermin and insect infestations and intentional loss.
It’s always wise to review your policy closely to understand what is excluded from coverage.
Florida Homes at Risk of Wildfires
Nearly 44% of Florida properties have at least a 0.03% likelihood of being damaged in a wildfire this year, which is more than 3.9 million, according to a First Street Foundation report called Fueling the Flames.
Some Florida counties have seen a jump in wildfire risks over the past 30 years, including Columbia, Jefferson and Sumter counties. The report says environmental changes have led to the increased risk, which includes drought conditions, higher temperatures, lower humidity and drier vegetation.
Florida counties with the most properties at risk of wildfires this year
Most Common Disasters in Florida
The Sunshine State’s sunny skies can, on occasion, be darkened by a variety of disasters. Florida has seen its fair share of severe storms but has been hit harder with hurricanes and fires.
Florida has seen 45 declared disasters due to massive natural catastrophes in the last 65-plus years. The 2020 hurricane season had a record-breaking 30 named storms, and by December 2021 there were 21. While Florida has been spared any major damage from hurricanes the last couple of years, homeowners need to be prepared.
When buying home insurance in Florida, be aware of special hurricane deductibles. Typically they are percentage-based and calculated based on the coverage amount that you have for your dwelling. For example, if your coverage is $300,000 and your deductible is 5%, that equates to $15,000.
And while hurricanes are well-known in Florida, there have actually been more fires declared as disasters over the years. For instance, in May 2020, the Five Mile Swamp Fire persisted for five days due to extremely dry conditions. It caused a two-day shutdown of Interstate 10, burned around 2,300 acres and destroyed 14 homes.
Disasters by Month in Florida
March through October has historically been the busiest stretch of the year for declared disasters in Florida, with May and September being the busiest months.
Disasters in Florida by Year
Over the past 20 years, Floridians contended with an average of about 3.5 declared disasters a year. In 2001, one of the busiest years for disasters, Florida endured nine fires, a severe freeze, severe storms, tornadoes and a tropical storm. In 2020, Florida survived three fires, Hurricane Isaias and Covid-19 was classified as a biological disaster.
Flood Insurance in Florida
A standard homeowners insurance policy doesn’t cover flood damage. And with flooding becoming more frequent, especially with the severe storms Florida receives, you may want to consider flood insurance.
Florida is no stranger to back-to-back storms or hurricanes that can dump a lot of rain quickly, causing major flooding issues. In November 2020, Hurricane Eta hit southern Florida with rainfall measuring 16 inches in some areas of Miami-Dade County. It flooded urban areas, including businesses and neighborhoods.
Many areas in the U.S. experience catastrophic and expensive flooding, but these events may not have been declared a federal disaster. Here’s a look at the number of recent floods in Florida.
Financial help from the government after a flood can be limited. It’s best to have your own flood insurance to rely on. Most people who have flood insurance buy it through the National Flood Insurance Program (NFIP), a federal program. Private flood insurance is also available.
FEMA’s Individuals and Households Program (IHP) can provide monetary and direct assistance after a major disaster or emergency, if you qualify. This program helps people find housing after a problem directly caused by a disaster that’s not covered by insurance or other sources.
Earthquakes in Florida
Florida is one of the two states with the fewest earthquakes, according to the United States Geological Survey. (North Dakota is the other state.) Florida simply isn’t close to any tectonic plate boundaries. However, there are rare times when earthquakes do occur. For instance, in 2020, a 4.0 magnitude earthquake was recorded near the Florida and Alabama state line in Santa Rosa County.
Tips for Buying Homeowners Insurance
Whether you’re about to close on your first home or seventh or have decided to switch insurance companies, you want to know you’re getting a good deal on great home insurance coverages. Here are suggestions for both newcomers and longtime homeowners:
- Assess your rebuilding costs. Ask your insurance company or a known contractor how much it would cost to rebuild your home with similar materials, based on labor costs in your local area. You want your dwelling coverage amount to be equal to this estimate.
- Review the advantage of replacement cost over actual cash value. Consider replacement cost coverage for your home and belongings—you will get the amount you need to replace your home and items with new versions instead of a depreciated amount.
- Consider add-on coverage for your expensive items. If you have high-value items, antiques or pricey sports or musical equipment, determine if scheduling personal property to receive extra coverage is what you need
- Evaluate your liability coverage needs. Make sure you buy an amount that matches your assets, which could be taken from you in a lawsuit, or at least $300,000.
- Assess coverage gaps. Some home insurance companies offer add-on endorsements to cover items your standard policy does not. For example, pay for damage from water or sewer backups, or provide higher limits for landscaping if damaged by theft or fire.
- Check financial ratings. Research financial strength ratings from companies such as A.M. Best or Standard & Poor’s. Some financial institutions won’t approve your mortgage unless your insurance company has at least an “A” financial strength rating.
- Ask for discounts. It never hurts to ask if you’re getting all the discounts that you’re eligible to attain. For example, you may get a discount for smart home features, like flood sensors, or for buying home and auto insurance from the same company.
- Compare quotes from multiple insurance companies. The price for the same policy can vary greatly among insurance providers. Shopping around gives you peace of mind that you found the best policy for the best price.
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Average home insurance rates were calculated using data from Quadrant Information Services. Rates are based on a policy with dwelling coverage of $300,000 and liability coverage of $100,000.