It took about 10 years, but Home Insurance prices are finally going down.
After years of 20 to 30% increases, Home Insurance prices have leveled off and are starting to go down.
Although it took them a long time, the Florida legislature finally gave consumers a victory over trial lawyers.
How did Florida Home Rates Get So High in the First place?
Lawsuit abuse, particularly the Assignment of Benefits scam (AOB), raised our prices through the roof.
As you might know, for 10 years running, AOB got so bad that of $12 billion in paid claims from 2007 to 2017, only 8% actually was paid to Homeowners.
The other 92% was paid to Attorneys.
According to data from the National Association of Insurance Commissioners (NAIC), while Florida accounts for only 9% of the homeowners claims in America, it is responsible for close to 80% of America’s property lawsuits. Litigated claims cost 5 times more than non-litigated claims.
And what did Home Insurance companies do as a response to all these claim payments?
They simply passed it on to us in the form of increased premiums.
What happened to Make the Home Insurance Prices Go Down?
In 2022, during a special session, Senate Bill 2A passed, effective July 1, 2023.
Here’s a list of the reforms passed and tweaked over the following years:
- Key Changes for Homeowners
- Old Rule. New Rule (Post-2022/23)
- Claim Filing Deadline
2 Years was shortened to 1 Year for initial/reopened claims - Attorney Fees
Insurer pays if you win, now Each party pays their own fees - Claim Response
90 days to pay/deny, now 60 days to pay or deny - Assignment of Benefits
Allowed (sign rights to contractor), now Prohibited for policies after Jan 1, 2023
Why are Homeowners Starting to See the Discounts Now?
There are a number of reasons why it took this long to see discounts.
As you might imagine, trial attorneys had to hurry before this cash cow was killed.
So there was a rush to file claims before the changes came into effect on July 1, 2023.
Now add all these rushed claims to the ones already in the system.
Home Insurance companies had to work through all these claim to know what there claims experience would be.
On top of this, it took some time for Companies to realize how these reforms would affect the future.
Not only were Claims-filed way down, but the amounts they paid was down too.
You can imagine what removing the 92% of claims paid to attorneys would do for these claim totals.
And just like they passed along the Rate increases during the abuse, Companies could now pass along the savings.
Now they could compete for market share by lowering prices as profitability increased.
What should Homeowners Do next?
Shop your Home Insurance policy to multiple carriers.
The best way to do that is to Contact Cronin Insurance Agency.
Our licensed, local, independent agents can shop our markets to find you the best value in Home Insurance.
We can help take advantage of Home Insurance Companies competing for you business.
And we can answer any questions you have about your Home Insurance Coverage.
One call does it all.