TAMPA, Fla. — Florida’s insurance industry has been embittered by fraud schemes and excessive litigation, creating a crisis for homeowners as they struggle to keep up with rising rates.
From now on, the insurer of last resort, Citizens Property Insurance, will increase its rates from November 1 for new policyholders. For existing policyholders, these rates will take effect once you renew. The rate increases were scheduled before Hurricane Ian destroyed thousands of homes and businesses.
When insurance rates go up, people like Pat Mabe are hit hard.
“I think our costs are astronomical. So everyone complains about gas because we pay for it every day, but you get these $10,000 to $11,000 insurance bills. It is important. It’s not 10 cents,” Mabe explained.
Mabe has worked with Citizen’s Property Insurance on and off for about 10 years. It’s generally considered Florida’s insurer of last resort, but in the past two years Citizen’s has seen explosive growth in customer numbers.
“We were abandoned by everyone, and we never had a claim. So I mean the citizens are left in the hands of the government so I can see their side even though I am very frustrated,” Mabe added.
She and other Citizens customers will see a 6.4% rate hike next week as her policy is renewed in November.
“I’m using a 25% off coupon. I bought stuff for the holidays. I mean, we’re trying to do what we can, I mean, to do it. Because it’s increasing, my landlord increased significantly. We’ve increased the franchise,” Mabe said.
Mark Friedlander of the Insurance Information Institute told ABC Action News that Florida’s insurance industry is in crisis, and it’s made worse by the destruction from Hurricane Ian.
“Before Hurricane Ian, the property insurance market in Florida was facing what we called a man-made crisis, driven by roof replacement fraud schemes combined with excessive levels of litigation,” Friedlander said.
He said that because of these factors Florida homeowners pay the highest average premium in the US at $4,231 statewide, nearly triple the US average of $1. $544.
“The average increase that homeowners have seen this year in Florida is 33% compared to the US average of 9%. So Floridians are already paying the highest averages in the country. And it’s not related to the hurricane,” Friedlander added.
But the devastation of Hurricane Ian is felt in more ways than one.
“We’re already hearing from some consumers that they’re getting more than 100% insurance renewals,” Friedlander said.
Florida’s insurer of last resort becomes the first and only option for many homeowners.
Citizens Property Insurance hit 1.1 million policies before the hurricane hit, doubling its share of policies since Florida’s homeowners crisis began several years ago.
“Over the past few months we’ve added around 9,000 new policies a week,” said Michael Peltier of Citizens Insurance. “Our rates are based on the losses we’ve had in the past. Well, it’s not really affected by the number of policies. You know, Citizens does what it’s supposed to do. It’s like when the market is healthy, our numbers are going down.”
For consumers, Friedlander said you can’t negotiate your insurance rate with the company, but you can try shopping around.
“If you could bundle your coverage, meaning you get your home and auto with the same insurer, that would result in significant savings, perhaps 15% to 20% on each policy. Where Citizens, it’s not possible because they don’t write auto,” Friedlander said.
He suggests speaking with your insurance agent as there may be discounts you are missing.
“If you have insurance with a private insurer, they offer many types of discounts, including a claim-free discount very often if you have never filed a claim, a loyalty discount meaning you have been a customer for a long time”, Friedlander said. Explain.
As for Mabe, she does what she can to keep up with the price of heaven.
“Well, you just cut. You eat beans and rice and a little more lettuce. Healthy, you know, you just cut, because you can’t live in Florida without insurance,” said mabe.