It seems like the cost of everything is going up due to inflation! But, what’s impacting Florida home insurance premiums? It must be more than inflation.
- Inflation Is A Factor – inflation is impacting the cost of building materials and construction labor. This is reflected in the annual increase of your Coverage A Dwelling limit. As this limit increases so does the cost of insurance.
- Florida Litigation Crisis – did you know that 80% of home insurance litigation countrywide occurs in Florida? However, Florida only accounts for 9% of the home insurance claims countrywide. Litigation costs are an additional expense to the insurance companies which they have to pass on to maintain their solvency. Recent legislation has corrected this, but there are hundreds of thousands of litigated claims still in the system waiting to get to court. Until these work their way through, insurance companies will continue to incur these costs. At the peak of the crisis, more than 10 insurance companies were driven out of business.
- Increased Reinsurance Costs – insurance companies purchase reinsurance to assure they have adequate financial capacity to pay claims during a natural disaster. Did you know that the cost of reinsurance has increased by 100% over the past 4 years? This is an expanse insurance companies have to pass on to their insureds to remain solvent.
- Limited Market Competition – more than 10 Florida insurance companies have gone out of business, while many more have simply left or stopped writing new business. Those that remain active have adjusted their risk appetite to maintain their open status. This reduced competition and risk appetite translates into higher prices.
When purchasing a home or simply trying to find more affordable coverage, you should turn to a professional to help you navigate the current market. David Dunham Insurance has been helping Florida insured’s for more than 20 years and we nearly every available market, so we are well equipped to find you the coverage you need at the lowest available price. Give us a call today so we can begin helping you!