May 9, 2021

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The Cost of Homeowners Insurance in Florida Is Already Going Up for 2021

4 min read

Homeowners insurance rates climbed by more than 34% in the state from 2016 to the present — the highest in the nation.

A living room with water damage.

A living room with water damage. Source: Getty Images

Home insurance companies in Florida have started filing rate increases for 2021. Allstate, for instance, plans to increase its rates by 13.8% in the new year. As rate changes trickle in throughout 2021, the record-breaking hurricane season that hit the state in the last year could mean many homeowners will see higher rates.

Florida’s home insurance rates were already on an incline. Since 2016 the cost of homeowners insurance in Florida has gone up by an average of 32.5%. For context, the cost of coverage rose by an average of 10.9% across the country during the same time.

Key findings:

Home insurance rate increases in Florida

Two insurers have already been approved by the state’s insurance commissioner to raise their rates for 2021: Allstate and Chubb. Allstate will increase its rates by 13.8% next year, and Chubb’s rates will go up by 1.1%. From 2015 to 2019, these companies had an average loss ratio — the percentage of claims paid to premiums collected — of just 64%. This is far lower than 100%, which would indicate that an insurer paid out as much in claims as it collected in premiums.

Why do homeowners insurance rates go up? After a claim, insurers compare the cost of a policyholder’s history of losses with their premiums. If a home has a history of recurrent losses, like water or storm damage or claims made because of stolen property, rates will likely be higher for that property — or coverage may be harder to come by.

Allstate and Chubb both raised their prices despite not losing money on claims settlements over the last five years. This, coupled with the number of Atlantic hurricanes that affected Floridians in 2020, doesn’t bode well for future increases across other companies in the state — especially FedNat and UPC, which had loss ratios greater than 90% from 2015 to 2019.

In Florida, the cost of homeowners insurance at Security First has risen by more than 183% since 2016 — five times higher than the state’s typical rate increase.

Insurer 2016 2017 2018 2019 2020 2021 Cumulative Rate Change %
Security First 10.9% 20.0% 0.0% 20.5% 76.6% 0.0% 183.2%
Heritage 9.5% 9.8% 13.8% 13.9% 14.6% 0.0% 78.4%
UPC -0.3% 6.8% 5.9% 12.7% 36.5% 0.0% 73.4%
Allstate 8.2% 11.2% 5.8% 1.8% 0.0% 13.8% 47.5%
Florida Peninsula -2.5% 9.7% 5.8% 8.0% 16.0% 0.0% 41.7%
Tower Hill 5.5% 6.1% 3.2% 1.5% 19.2% 0.0% 39.7%
FedNat Insurance Company 4.6% 9.7% 0.0% 3.5% 9.6% 0.0% 30.2%
Universal Property & Casualty 0.0% 0.0% 5.8% 4.7% 12.6% 0.0% 24.6%
Chubb 0.0% 0.0% 3.9% 5.1% 8.0% 1.1% 19.2%
Nationwide 3.7% 0.0% 5.9% 2.0% 0.0% 0.0% 12.0%
Progressive 1.4% 0.0% 4.0% 1.8% 3.4% 0.0% 10.9%
Liberty Mutual 2.0% 4.8% 0.9% 0.9% 0.0% 0.0% 8.9%
American Family 0.0% 0.7% 0.0% 0.3% 1.6% 0.0% 2.6%
Farmers 0.0% 0.0% 0.0% 0.0% 0.9% 0.0% 0.9%
USAA 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Travelers 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
State Farm -5.3% -1.1% 0.0% -15.4% 0.0% 0.0% -20.8%
Average rate increase 2.2% 4.6% 3.2% 3.6% 11.7% 0.9% 32.5%

The largest home insurer in the state by written premiums, Universal P&C, has increased its rates by 24.6% since 2016. State Farm, the second-largest insurance provider in Florida, actually decreased its rates by 20.8% over the same time. This made State Farm the only insurer to reduce its rates overall.

How Florida’s homeowners insurance rates compare to other states

On average, the cost of homeowners insurance in Florida has gone up by 32.5% since 2016. This is more than three times higher than the average rate change that the rest of the country experienced during this time period (10.9%).

Nationally, homeowners insurance rates among the country’s largest providers have increased by 10.9% on average since 2016, but they rose much more sharply in Florida. Following Florida, there were six states where the home insurance rates offered by the 10 largest insurance companies increased by at least 20%.

These rate increases may be due to higher rates of natural disasters — such as wildfires in California and Colorado, and hurricanes in Georgia. In fact, based on ValuePenguin’s findings in an earlier study, many of the states that experienced the highest rate increases also had the most expenses for property damage after disasters, per household.

In only two states, Hawaii and Alaska, the largest insurance providers experienced a negative rate change.

Rank State Cumulative rate increase
National average 10.9%
1 Florida 34.5%
2 Nebraska 27.9%
3 Colorado 21.5%
4 California 20.8%
5 Georgia 20.4%
6 South Dakota 20.4%
7 Rhode Island 20.2%
8 Montana 19.6%
9 Virginia 18.4%
10 Texas 17.5%
11 Maryland 17.0%
12 New Mexico 17.0%
13 Illinois 15.6%
14 Oklahoma 15.5%
15 Connecticut 14.6%
16 Utah 14.2%
17 Oregon 13.2%
18 Missouri 12.7%
19 Kansas 12.2%
20 Massachusetts 11.9%
21 Washington 11.9%
22 Idaho 11.7%
23 Delaware 11.2%
24 Iowa 11.1%
25 North Carolina 10.7%
26 Arizona 10.6%
27 Arkansas 9.8%
28 Nevada 9.6%
29 Mississippi 8.1%
30 New York 7.9%
31 Minnesota 7.7%
32 New Hampshire 7.4%
33 Tennessee 7.2%
34 New Jersey 6.8%
35 Maine 6.2%
36 Alabama 6.1%
37 Michigan 6.1%
38 West Virginia 5.7%
39 North Dakota 5.6%
40 Kentucky 5.4%
41 Ohio 5.3%
42 Vermont 5.0%
43 Pennsylvania 4.1%
44 Indiana 3.8%
45 District of Columbia 2.9%
46 Louisiana 2.3%
47 Wisconsin 2.3%
48 South Carolina 1.6%
49 Wyoming 0.5%
50 Alaska -1.7%
51 Hawaii -2.2%

How can Floridians find cheap homeowners insurance rates?

Homeowners in Florida may still find affordable insurance by comparing costs from multiple companies and taking advantage of discounts.

In addition to having experienced the highest average rate increases over the last five years, Florida already has a relatively high cost of home insurance compared to other states. Moreover, the state’s insurance prices will likely continue to rise in 2021 as a result of the claims paid to homes damaged by this past summer’s storms.

ValuePenguin recommends that shoppers compare rates from multiple homeowners insurance providers in order to find their best rate, since the cost of coverage varies depending on one’s location, personal history, desired coverage limits and the company offering quotes.

Additionally, it’s important for property owners to reevaluate their homeowners insurance annually. As each company increases its costs at different rates, the most affordable company one year may no longer be the cheapest option the following year. Policyholders may also find that their property is worth less than it was when they purchased their homeowners insurance. While this may result from natural depreciation or conscious downsizing, the policyholder risks paying for more coverage than they need.

Methodology

ValuePenguin tabulated the rate increases in the U.S. homeowners insurance marketplace using the RateWatch tool from S&P. We calculated average rate changes across the country according to each state’s 10 largest insurance providers. In Florida, we tracked rates from every provider available in S&P’s database.