Reasons behind the high cost of home insurance in Florida
Experts in the insurance industry point to a number of factors that contribute to the rising cost of homeowners insurance in Florida. They include these issues.
Geography
Perhaps at the very core of Florida’s high home insurance rates is its location. The state is a large peninsula that extends into the warm waters of the Gulf of Mexico and South Atlantic. This exposes the entire state to the high winds and torrential rain of the six-month long hurricane season.
Millions of people live along Florida’s 1,359 miles of exposed coastline. Even at its highest point, the state only rises a few hundred feet above sea level. Major cities like Miami, Tampa, and Jacksonville sit along its beaches. All of these risk factors contribute to high homeowners insurance costs.
Ease of litigation
Insurers have long complained that Florida laws make it easier for litigants in insurance cases to sue insurers. In an effort to stabilize prices for home insurance in Florida, legislation has been passed to help reduce unwarranted and excessive litigation.
Fraud
Insurers claim that there have been billions of dollars in fraudulent claims that contribute to the high cost of home insurance. These, too, have been addressed in 2022 with legislation regarding contractor solicitation.
Cost of reinsurance
Reinsurance is protection for insurance companies should claims become unmanageable. The high cost of reinsurance has forced many insurance companies to raise rates, while others have ceased covering homes in Florida.
Not just Florida
While Florida has a history of leading the country in average homeowner insurance costs, prices are also rising significantly in other parts of the country. Texas, Louisiana, and Oklahoma have all been ranked in the top three for average cost of homeowner insurance in recent years. Natural disasters and the high cost of home repairs and replacements are often cited as contributing to the problem.
Reach out to Kin
Kin specializes in providing home insurance for homes in many areas prone to disaster where insurance costs are climbing, including:
High homeowners insurance rates may cause some Florida homeowners to make risky decisions when it comes to home insurance. We can help review your current coverage and explore your options. Before you self-insure or increase your deductible to the point of them offering little protection, reach out to Kin.
