“The highest rates in the United States” – Florida homeowners are expected to see 40% rate increases on average in 2023; the average rate increase in 2022 was 33%. Floridians are paying nearly three times the US average for homeowners insurance.
Why are we seeing skyrocketing rates? The two biggest drivers right now are an excess of fraudulent and frivolous claims, and catastrophic damage from hurricanes.
Florida accounts for 9% of the nation’s homeowners insurance claims, but 79% of homeowners insurance lawsuits. In the last 10 years $51 billion has been paid by insurers, and of that 71% went to attorneys’ fees and public adjusters – only 8% went to claimants.
In the last two years insurance companies have faced consecutive net underwriting losses of over $1 billion. These losses have forced seven insurance companies to be declared insolvent by the state of Florida.
In addition to fraudulent claim payouts, insurers are feeling the strain from catastrophic hurricane damage. Thus far over $109 billion in damage has been claimed from Hurricane Ian, making it the costliest storm in the state’s history.
The Florida legislature has introduced legislature to try and provide relief to consumers by reducing the number of lawsuits filed against insurers, supplementing struggling insurers with a $1 billion taxpayer funded aid program and creating tighter guidelines for how a claim is handled on the insurers side.
The legislation that has passed is expected to bring relief within 18 months – the question is if Floridians can hang on that long in an already strained economy.