Florida Home Insurance trends for 2020

Big changes coming to Florida Home Insurance in 2020

Bad news for Florida Homeowners in 2020. Insurance prices will go up and availability will go down.

In 2020, Florida Home insurance companies are reducing exposure, reducing coverage and raising prices – especially in South Florida.

Demotech, the insurance company rating agency, might downgrade up to 40 carriers below the all-important A rating.


Adverse Claims Experience

As a result of a series of hurricanes like Irma and Michael, assignment of claims benefits to contractors, and the proliferation of attorney and public adjuster-filed claims, its been a rough year financially for Home Insurance companies.

Add these up and you have higher claim volume than anticipated by the insurance companies. This puts pressure on companies who in turn increase prices to make up the difference and to adjust for future claims.

This is especially evident in water damage claims. Claims for broken pipes and leaky air conditioners have gotten more and more expensive as contractors and attorneys add their fees on top.

Water damage claims increased in claim pay-outs
Water Damage claims will cause big changes in Florida Home Insurance in 2020.

Reducing Coverage in 2020

Home insurance companies have responded in 2020 by restricting coverage on older homes through water damage limitations.

Many policies will only cover up to $10,000 of water damage for homes built more than 30 years ago.

And some companies are not offering any water damage coverage at all without endorsement.

Reducing Risk Exposure in 2020

Still others are reducing exposure by non-renewing home insurance policies in those areas where claims were highest:

Dade, Broward, and Palm Beach Counties.

They may use different tactics such as closing zip codes, un-appointing agents in these areas, and the old “Non-renewal to reduce exposure”.

Recent hurricanes and their resulting claims have lessened Insurance companies appetite in South Florida.
Hurricanes impact Home Insurance Companies’ willingness to write more Insurance in Florida.

Raising Rates in 2020

Practically all of the companies have filed for rate increases of between 15 and 25%.

Many will choose 15% increases because these can get fast approval from the State. But most will tell you this is not enough, so they’ll do it every year until they get to actuarially sound rates.

Others will go for the 25 – 30% and go through the rigors of the OIR’s decision because they need an increase badly.

Demotech Rating Agency

Due to the larger payouts for claims, many insurance companies have used their reserves to cover the costs. These reduced reserves threaten the A rating that these companies now enjoy.

Demotech has been looking at these reduced reserves and re-evaluating whether these companies still deserve the A rating.

Without an A rating, banks may not approve a company insuring houses with mortgages.

This could cause problems with existing mortgages as well as reduce the competition between companies that still maintain the A rating.

This new day in our marketplace contemplates Demotech actually downgrading the financial stability rating of more than 40 percent of the Florida residential property carriers it follows to “S” (Substantial). In that instant, tens, if not, hundreds of thousands of mortgagees would technically be in default of their loan covenants…

Jeff Grady, president of the Florida Association of Insurance Agents

Less companies, Less competition, Higher prices.

So the forecast for Florida Home Insurance in 2020 is pretty bleak. Higher prices, lower coverage, and less availability to markets.

If you have a good company, try to keep them.

If not, it’s more vital than ever to be able to shop your home insurance if you receive any of these increases, or a non-renewal in 2020.

And the best way to do that is to with Cronin Insurance!

Low rates, Choice of Companies and Personal Advice.

Cronin Insurance is the Wise Choice.


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