Florida Homeowners Facing Soaring Insurance Premiums

A perfect storm is truly brewing in the Sunshine State: rising Florida homeowners insurance premiums, a shrinking pool of insurers willing to cover properties, and the looming threat of hurricane season have all created a sense of uncertainty and financial strain for many residents.

A recent Redfin report has revealed that nearly three-quarters of the state’s homeowners have been impacted by rising costs or coverage changes in the past year. This is significantly higher than the national average, as less than half (44.6%) of homeowners report similar experiences.

Why the sudden concern? To start, 11 insurance companies have fled the state in recent years, overwhelmed by the growing risk of floods and storms. With fewer companies offering coverage, the number of uninsured homes is on the rise. Reports estimate that 15-20% of Florida homeowners have opted to forgo coverage entirely — a decision that exposes them to immense financial risk in the event of a disaster.

Soaring premiums add another layer of stress to the matter. Data from Bindable shows that the average annual cost of homeowners insurance in the state is a staggering $2,625, about 37% higher than the national average of $1,915. This burden is amplified by the threat of hurricane season, when comprehensive coverage is paramount.

However, this premium increase, coupled with limited options, have left homeowners feeling exposed and vulnerable. The consequences of being uninsured can be devastating; according to Lendingtree and Penguin Value Analysts, the average flood damage claim in Florida exceeds $37,000. Without proper insurance, homeowners could be left financially strapped after a disaster, facing the task of funding the rebuild or repair of their homes entirely out of their pockets.

Related: Read "What Is Homeowners Insurance and What Does It Do?"

Recent Developments: Finding Solutions for Homeowners

There is a glimmer of hope amidst the crisis, though, as eight new insurance companies have recently been approved to operate in Florida. This influx of offerings could potentially lead to a more stable market and lower premiums in the long run. However, there is a caveat: these companies are currently prioritizing policyholders who are being dropped by Citizens Property Insurance, the state-run insurer of last resort. This means that homeowners who haven’t previously been insured by Citizens might face some difficulty finding coverage with the new companies. Experts anticipate that these companies will start offering policies to the general public by the third quarter of 2024.

Another positive development is the partnership between Bindable, an insurance distribution platform, and HoneyQuote, a home insurance comparison tool. The two are working together to simplify the process of finding affordable and comprehensive coverage for Florida homeowners. HoneyQuote allows users to compare rates from over 30 insurance companies entirely online, potentially leading to more competitive options and helping homeowners navigate the complex insurance market.

(Psst...Hometap has also partnered with HoneyQuote. If you own a property in Florida, you'll find HoneyQuote in the Featured Offers section of your Home Equity Dashboard).

FAQ for Florida Homeowners

How do I know if I’m no longer covered?

Your insurance company is legally obligated to notify you if they decide not to renew your policy. However, it’s always a good practice to review your policy documents and renewal notices regularly to stay informed about your coverage status.

How do I know if I have enough coverage?

A thorough review of your policy details is crucial. Standard homeowners insurance typically covers damage caused by fire, theft, and some weather events. However, flood insurance is usually a separate policy and is required in Florida due to the high flood risk. Consulting with an insurance agent can help you assess your specific needs and ensure you have adequate coverage.

What do I do if I don’t have enough coverage?

If you find yourself without adequate coverage, you can follow these steps:

• Review your policy
• Assess your needs — confirm that your home value is accurate
• Determine whether add-ons like flood, windstorm, earthquake, or umbrella insurance make sense for you
• Consult your insurance agent
• Shop around

Am I required to have homeowners insurance in Florida?

No, but lenders require it, so if you have a mortgage but no insurance, you could default on your mortgage and risk foreclosure.

How do I find out if a company is insured in Florida?

The Florida Department of Financial Services maintains a database that allows you to verify that an insurance company is licensed to operate in the state. This is an important step to ensure you’re working with a legitimate insurer.

Related: Read "How to Tell If You Got a Good Homeowner’s Insurance Rate (And What to Do If You Didn’t)"

Staying on Top of Your Homeownership Needs

Along with reviewing your insurance coverage and figuring out which plan works best for your needs, our Home Equity Dashboard can help navigate the complexities of homeownership and financing. By providing you with a clear picture of you home’s estimated value and equity, the Dashboard can help you make more informed decisions about your coverage needs.

Additionally, the Dashboard features access to a network of our best-in-class partners, including insurance marketplaces like HoneyQuote. This can streamline the process of shopping for insurance by comparing personalized insurance quotes and policies for your home, side by side. With over 30 insurance carrier partners and objective help from licensed experts, Honeyquote may help you find the right coverage in a challenging insurance landscape.

Sign up for the free Home Equity Dashboard and get started today.