February 3, 2023


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Why you could be paying more for the same protection

JACKSONVILLE, Fla. – Sticker shock is a mild description of what Florida homeowners may be experiencing after learning they may be required to pay to keep their homeowners insurance active next year.

The Office of Insurance Regulation reports it has approved insurance rate increases as high as 33{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, and insurance experts say the industry as a whole is nearing a crisis.

Let’s say your homeowners insurance is $4,400 dollars a year. For no fault of your own, you could be forced to pay another $1,450 on top of that. According to Personal Insurance Federation of Florida CEO Michael Carlson, there are some major problems in the insurance industry right now that appear to be worsening.

″I’m afraid that people on fixed incomes and people on limited means just can’t afford these increases, are going to be driven out of their homes,” Carlson said.

It’s not that farfetched scenario for some Florida homeowners, according to Carlson. His nonprofit agency represents national property insurance companies, many of which are struggling to keep up with rising expenses of their own.

The increasing amount of money insurance companies are paying to insure themselves is just one of the reasons the costs are being passed on to homeowners. The other main reason for insurance rate increases: unscrupulous contractors who target neighborhoods, knock on doors and ask if they can repair or replace your roof.

″Sometimes roofs are being replaced with no damage. Sometimes roofs are being damaged by unscrupulous contractors who are trying to set up a claim. And sometimes roofs are not even repaired by a contractor who has engaged the homeowner to do repairs,” Carlson said.

Carlson says this small group of unscrupulous actors in Florida is having a significant effect on insurance rates. If they get into a dispute with an insurance company, Carlson says many of them will file a lawsuit to leverage the threat of paying attorney fees.

″It’s really unfortunate rates payers are paying, and even worse is folks are being nonrenewed, and in parts of the state, notably along I-4, there are ZIP code areas where are insurance companies are refusing to write new business on the property area because the cost of claims and related litigation in those parts of the state are so dramatic that the insurers don’t believe they can actually do business in these areas,” Carlson said.

Insurance experts say the trend started in South Florida, moved up along the Interstate 4 corridor and growing litigation is occurring now in Duval County and throughout Northeast Florida. Carlson says legislators need to act to protect homeowners from being forced to foot the bill.

“The lawsuit filing business model is the one that we really need to be targeting. We need to take away some incentive to get attorney fees from settlements from insurance companies that drive these claims and drive these lawsuits,” Carlson said.

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