Why Are Insurance coverage Firms Leaving Florida?

As tens of millions of Floridians search for substitute protection, it’s value asking…

…why are insurance coverage corporations leaving Florida?


When you’ve been listening to Florida’s insurance coverage market, you’ve in all probability heard the time period “disaster” extra instances than you’re snug with. Not solely are house insurance coverage charges growing, householders are sometimes compelled to search out substitute protection.

The information is crammed with tales of insurance coverage carriers who’ve stopped writing new insurance policies, pulled out of the state, and even gone out of enterprise solely. And these aren’t “mother and pop” insurance coverage corporations, both—Farmers Insurance coverage, Nationwide, and Progressive have all introduced main adjustments to their presence within the Florida market.

So what’s a Florida house owner to do?

To begin with, don’t panic! Whereas we now have seen some upheaval within the insurance coverage trade, you do have choices in terms of insurance coverage protection.


Why Are Insurance coverage Firms Leaving Florida?

In easy phrases, insurance coverage corporations are leaving Florida as a result of it’s finest for his or her backside line.

When an insurance coverage firm is paying out extra in claims than it’s taking in, they run the danger of not with the ability to pay out any claims in any respect. Typically, pulling out of a selected market is one of the simplest ways to remain in enterprise.

However why are issues so dire in Florida?

aerial view of hurricane viewed from space

1. Lawsuits

Roughly 79% of house insurance coverage lawsuits within the US happen in Florida, although solely 9% of house insurance coverage claims occur right here. That form of litigation can take an enormous monetary toll.

In line with the Insurance coverage Data Institute, litigation is among the largest contributors to rising insurance coverage premiums.


2. Fraud

Fraud is current in nearly each trade, and insurance coverage isn’t any exception. From Project of Profit agreements to householders submitting fraudulent claims, there’s all the time somebody seeking to make a fast buck as a result of (as they motive) “the insurance coverage firm can afford it!”

Nonetheless, when tens of millions of individuals all have the identical concept, the insurance coverage corporations can’t all the time afford to pay all of them. In consequence, they’re compelled to boost their charges to make up for the losses or depart the state.

3. Hurricanes

When you’ve lived via a minimum of one hurricane season, you perceive the affect that these storms have on Florida house insurance coverage.

Cleansing up after a serious storm is dear; Hurricane Ian induced an estimated $109 billion in injury in Florida alone! In consequence, insurance coverage corporations could generally resolve to solely write sure varieties of insurance policies or pull out of the state altogether.

aerial view of suburban neighborhood

“Final Resort” Insurance coverage

So what occurs when your insurance coverage firm cancels your coverage and charges are going via the roof?

For greater than 1,000,000 Floridians, the reply is to show to the Florida property insurer of final resort: Residents. Nonetheless, the state-run, non-profit insurance coverage firm isn’t all the time the “lifesaver” that individuals suppose it’s.

We’ve warned our shoppers to keep away from Residents Property Insurance coverage up to now, as a result of their historical past of less-than-optimal protection. Even Residents CEO and President Barry Gilway said that it was “unlucky” that Residents was changing into the primary or solely alternative for some Florida householders.


What’s the Resolution?

The excellent news is that there’s already an answer in play. In December 2022, Florida lawmakers handed Senate Reform Invoice 2-A to deal with a few of Florida’s most obtrusive insurance coverage points.

And whereas these adjustments are beginning to take impact, it can take a number of years for policyholders to really feel the complete advantages.

Within the meantime, new insurance coverage corporations are beginning to transfer into the Sunshine State. The Florida Workplace of Insurance coverage Regulation (OIR) has already permitted greater than 30 new “take out corporations” with an purpose to take away policyholders from Residents and Florida’s Chief Monetary Officer Jimmy Patronis stays eager for the longer term.

Family holding flattened cardboard over their heads

How To Discover Nice Protection

In higher information, Florida householders who’re on the lookout for nice protection nonetheless have loads of choices.

Buying the market via an impartial insurance coverage agent is by far one of the simplest ways to get the protection you want. As a result of they’re not tied to a selected provider, impartial brokers can select from a variety of insurance policies to search out the one that most closely fits your wants and threat tolerance.

What’s extra, they’ve useful recommendation on find out how to decrease house insurance coverage prices with out sacrificing protection.


HLI Is Right here To Keep!

As insurance coverage corporations depart Florida, it helps to know that you’ve got an agent who’s dedicated to protecting your property protected.

Over the past 30 years, Harry Levine Insurance coverage has constructed a fame of honesty, integrity, and loyalty to our prospects. We keep on the forefront of the trade and take pleasure in staying forward of the curve to be sure you and your loved ones are protected.

Name at present for a free quote.


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