Being a homeowner in Florida is becoming harder and harder. While interest rates are at an all-time low; homeowners insurance premiums are at an all-time high. Carriers throughout the state are raising rates sometimes as much as 30-40% in some areas, and they say they need more. Because homeowners insurance is necessary, we take a look at why the costs continue to rise and what we can all do to save money.
For many years Florida was spared from the wrath of hurricanes or tropical storms making landfall in the state. Policyholders are now confused as to why their rate continues to increase even though they have not filed a claim. The problem is complex and multifaceted.
The Insurance Industry
Insurance consists of a global network of investors and insurers taking risks and speculating on when, where, and at what severity a natural disaster may occur. The storms affecting the State of Florida are not the only ones affecting the rates homeowners are paying for their policies. Insurance companies, such as Edison Insurance Company, just like many homeowners, also purchase insurance. The rates paid by private carriers are dependent upon the global stage, as well as the local market.
Global events such as the typhoons in Asia, earthquakes in Haiti, and other such natural disasters affect the costs of doing business in the State of Florida. Hurricanes affecting Texas and Louisiana and sparing Florida are a sign of good fortune, but also increase the cost of everyone's premiums.
In the State of Florida, the rampant insurance fraud by unscrupulous contractors, as well as the overwhelming filing of frivolous lawsuits have forced carriers to their limits and forced them to operate while being financially insolvent or close their doors.
To provide coverage for our policyholders, Edison Insurance purchases reinsurance only from A-rated companies. Edison has secured coverage in the event of multiple storms in the same year, as well as coverage for damage from a 1 in a 100-year storm; a storm we hope to never experience. Our priority is to be here for our policyholders when they need us for many years to come. It is important to note, when shopping for homeowners insurance, peace of mind comes from knowing your carrier is financially stable and prepared to stand by their policyholders.
Fighting Fraud
Fraud costs the insurance industry millions of dollars each year. Understanding how to avoid and report fraud is how you can help keep the costs of your premiums low. Currently, areas throughout the state are being blanketed with advertisements from roofing companies claiming they will be able to replace your roof at no charge as the insurance company will pay for all damage due to Hurricane Irma. Hurricane Irma occurred 3 years ago. Any wind damage suffered by the passing of this storm would have been noticed a long time before this year. Yet, contractors continue to visit homeowners, enticing them with exorbitant incentives, and encouraging them to sue insurance carriers for, sometimes, up to 3 times the cost of a roof replacement.
Oftentimes, contractors convince homeowners to sign an Assignment of Benefits form (AOB), effectively stripping away the rights of the homeowner to make decisions on their home repairs, as well as their ability to recover monetary compensation for the covered losses. The AOB misdealings were so prevalent in Florida, the legislature passed a reform to curve the use of AOBs and protect the rights of policyholders.
If you see fraud, report it. You can do so anonymously, directly to the state, by visiting https://first.fldfs.com/.
Review your policy
Talking to your agent and having an honest conversation about your home and insurance needs will help you assess what coverage is really needed, and where savings can be captured. Here are a few items to start the conversation:
- New roof – if you have replaced your roof in the past 10 years, you may want to consider obtaining a wind mitigation inspection as discounts may be available.
- Opening protection – if you have added storm shutters, hurricane windows, and doors to ALL your openings, submitting a wind mitigation inspection can save you money.
- Deductibles – increasing your hurricane deductible may be a risk, however, it can save you dollars in the short term.
- Limiting your water coverage – limiting your coverage to $10K for a water loss occurring in your home, can significantly reduce your insurance premium.
- Maintenance contract - although not covered by your homeowners insurance policy, when appliances break, suddenly and accidentally, they may cause damage to your home which is covered by your homeowners policy. Having a maintenance program for your water heater, refrigerator, washer, dryer, etc., can save you money.
Insurance is costly, but we can all work together, homeowner, insurance carrier, and agent, to impart industry knowledge, combat fraud, and save money. Ask your agent, how they can help you find the proper coverage and savings, or call us at 866-568-8922.
