Despite Last Year’s Hurricane Damage, Insurance Companies Sticking with Florida Homeowners

13 Jul
Florida home insurance companies and rates

Insurance companies in Florida have been enough time to build up big enough reserves that paying out claims for hurricane Matthew was not a financial burden.

Roughly a decade ago hurricane Charley, Francis, Ivan and Jeanne hit the coast of Florida in one year and caused $45 billion in property damage. As a result many of the nations largest insurance companies pulled out of the Florida market altogether. There were a number of years before they returned, and premiums were definitely higher when a few of them decided to come back, many never returned.

Last fall hurricane Matthew struck the Florida coast and caused roughly $1.18 billion in damage according to the Florida Office of Insurance Regulation. Fortunately, for Florida residents insurance companies reacted much differently this time. The impact of hurricane Matthew was not devastating enough to make insurance companies pull out the state.

What Changed?

One of the big factors that has changed is the fact that Florida has not seen a major hurricane for over a decade which has given insurance companies enough time to build up big enough reserves that paying out claims for hurricane Matthew was not a financial burden.

One other major difference is that the majority of homeowner policies being written in Florida are sold by Florida based insurance companies. These companies were established to specifically serve the Sunshine State, which is why they aren’t going to pull out of the market due to a single hurricane.

According to local industry experts, Hurricane Matthew was basically a non-event as far as the homeowner insurance companies operating in the state were concerned.

Prices are Still High

While insurance companies are still willing to write homeowner policies in Florida, prices are relatively high compared to the rest of the country. According to recent homeowners insurance data and statistics, the average homeowner policy premium in Florida is $1,471 compared to the national average of $964.

There are a number of reasons that homeowners insurance in Florida cost more than most other states. Hurricanes and frequent severe weather are one of the major reasons premiums are so high in Florida. Despite its name, the Sunshine State is home to hurricanes, thunderstorms, flooding and wind damage.

According to industry statistics wind and rain damage are responsible for the majority of claims, which tend to be very expensive due to the extensive damage they can cause.

The fact that most of the insurance companies operating in Florida are Florida-based also results in higher premiums. There is simply not as much competition in Florida as there are in other states since many of the major insurance companies pulled out of the state. Fewer insurance companies results in higher prices because there is less price competition.

How to Save on Homeowners Insurance

While you will absolutely pay more for homeowners insurance in Florida there are a few ways you can save. Here are a few tips to cut your premium:

  • Shop Around: Despite the fact that competition is not as robust in Florida as it is in other states it still pays to shop around. Insurance companies rate risk differently so premiums can vary dramatically. Shop now for Florida Home Insurance Quotes!
  • Discounts: Insurance companies offer a variety of discounts so make sure you are getting every discount that you are qualified to receive. Common discounts include bundling, monitored alarm systems as well as upgrading your roof with wind resistant materials.
  • Up Your Deductible: Raising your deductible will lower your premium. Raise your deductible as high as you can afford. However, make sure that you can afford to easily cover the deductible in the event you have to make a claim.

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