Introduction
Florida’s private insurance market has been unstable and it has had problems in past years. With the reinsurance price increase being the reason, things are getting worse. Hurricane activity is going up and so the insurance claims battle is also rising. The move eventually led to a decline in the number of insurance firms operating in all of Florida which includes Brevard County Florida.
Why Insurance Costs Are Going Up?
Here are some reasons for higher costs of insurance:
● Rising Reinsurance Costs
In parts of Florida, reinsurance costs have doubled as more hurricanes hit the State. The hurricane situation is characterised as stronger and more intense. This has adversely affected the insurers’ profitability and led them to raise the premiums for everyone paying them.
● Increase in Hurricane Activity
Florida is particularly at risk of storms, and the state has had an increase in storm activity over the past few years. This has caused more claims that are increasingly expensive.
● Escalating Litigation Expenses
In Florida, people fight their own cases which has subsequently resulted in increased litigation expenses for insurers. This, in turn, increased the costs for insurers to defend the claims, and eventually the premiums rose as well.
● Reduction in Insurers
Many small insurers have left Florida as well as Brevard County Florida due to the situation. Some major insurers have reduced their presence. This has built up a lack of competition and also led to premium hikes.
Impact on Homeowners
The changes in the landscape of home insurance in Florida and Brevard County have been noticeable. Homeowners have been the most affected ones. The premiums have gone up, causing many homeowners to face affordability issues. It has been a problematic time for the people, but still, there is hope. New roofs and tougher regulations around four point inspections are becoming more popular. Citizens property insurance for homeowners has been the more affordable option for home buyers and owners.
Government Response
The Florida government is trying to fix these problems. In 2002
Citizens Property Insurance Corporation was established by the Florida Legislature in August 2002 through the enactment of Section 627.351(6) of the Florida Statutes. Designed as a not-for-profit, tax-exempt government entity, its primary purpose is to offer property insurance to Florida property owners who are unable to secure coverage through the private market. This initiative addresses the needs of residents in a state prone to hurricanes, providing a crucial safety net for homeowners facing insurability challenges.
In 2022, they made a law to try and lower the costs of fighting in court. They also took steps to help insurance companies get reinsurance easier. Work was done to give homeowners some financial help. However, it’s still a big question whether these steps will withstand the tests of time.