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Industry expert says property insurance market remains a mess in Florida

Homes that sustained wind damage caused by Hurricane Ian are seen in this aerial view, Thursday, Sept. 29, 2022, in Fort Myers, Fla. (AP Photo/Marta Lavandier)
Homes that sustained wind damage caused by Hurricane Ian are seen in this aerial view, Thursday, Sept. 29, 2022, in Fort Myers, Fla. (AP Photo/Marta Lavandier)

The cost of property insurance remains a hot topic in Florida. Even before Hurricane Ian, which wreaked havoc across the state, including here in Central Florida, the property insurance market was volatile.

Mackenzie Redding, agency owner of Goosehead Insurance, said rates are currently the highest they’ve ever been in Florida.

Listen to the full conversation in the player above.

 Mackenzie Redding is agency owner of Goosehead Insurance
Mackenzie Redding
Goosehead Insurance
Mackenzie Redding is agency owner of Goosehead Insurance

Current state of the market

It’s been about 6 months since Hurricane Ian made landfall in September 2022. The storm devastated parts of the state and put even more stress on Florida’s already volatile property insurance market.

Mackenzie Redding said the market is still a mess.

"It's absolutely the worst it has ever been. And rates are the highest they have ever been," she said. "And it's simply due to all of the fraud that's occurring throughout Florida. So right now 74% of claims filed are fraudulent."

Even though lawmakers met for aspecial session in December 2022 and approved a plan to address the skyrocketing costs, Redding believes it will be another two to five years until we begin to recover.

She said the measure that were passed in December should have been passed years ago.

"So we're a little late. And that's definitely making an impact. And even though the things passed in December were very beneficial to making an impact for our future. The tort reform that was passed last week, on the one-way attorneys fees is going to make the most difference, I think."

Location plays a big factor into how much it costs to insure your home.

"The closer you go to the coast, the more expensive it's going to be. South Florida is very expensive," said Redding. "So average rates, we see there can be $5,000 to rates that are $20,000. And it's just simply due to the location to the water,

She said the average cost to insure home in Central Florida is between $3,500 and $3,800.

The price to insure a home in Florida is almost double the price compared to homes in other states, according to Redding, with an average cost around $1,500.

"People coming from out of state and we get a lot of calls, and they're only paying $100 for home insurance. And it's you know, they come here and they're paying $3,000 or higher. So it's a lot to intake."

She said that has caused some of her clients who came to Florida to retire, to move back to their home state.

"Because they can't afford the increases in taxes, in home insurance and auto. They can't sustain. And when you're on the fixed income, it's becoming harder and harder."

Flood Insurance

In 2022, Citizens Insurance surpassed 1 million policies and the company says they'll eventually require all customers to carry flood insurance.

In the aftermath of Hurricanes Ian and Nicole, the number of Florida homeowners lacking flood insurance was prevalent.

Redding said she's seeing the number of homeowners buying flood insurance is improving, but there's still a long road ahead.

"And it's simply because people have to take the rest because they can't afford the additional cost."

She said Citizens insurance is on track to hit over 2 million policies this year.

"And if you don't have flood insurance, and can budget for it, I would absolutely not go without it. Because you truly never know."

Redding said the cost of flood insurance can vary from home to home in a single neighborhood.

"Right now, I'm seeing rates anywhere from $485 upwards to over $1,000. And then of course, if you're in a higher risk flood zone, you're maybe digesting several thousand dollars a year in flood insurance."

Possible Solutions

On March 24, 2023, Florida Gov. Ron DeSantis signed HB 837 into law.

"That's going to focus more on the one-way attorneys fees," said Redding.

She said that will make a significant difference, but the real solution is rate stabilization.

"The renewals coming across our desk are anywhere from 200% to 400% rate increases year over year. And that's the new normal right now."

Redding said a rate increase of 150% or below is now considered a low rate.

As rates start stabilize, Redding said more private insurance companies will return to the state.

"And then hopefully we'll see more more options for better coverage as a whole."

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