A recent forecast by one of the largest re-insurance companies in the world is not great news for Florida homeowners. The forecast predicts that insurance companies will be paying more for re-insurance coverage in the new year and those costs are typically passed on to policyholders via higher premiums.
Re-insurance is coverage your insurance company purchases to help cover their losses if they are hit with a massive number of claims due to a major storm or other event.
According the forecast by Gallagher Re, one of the worlds largest re-insurance companies, the cost for re-insurance could be up by 30% or more in 2024 and those costs will almost definitely be passed on to homeowners via higher premiums.
Mark Friedlander with the Insurance Information Institute warns that insurers will pass their higher re-insurance costs to their customers. “The hurricane season coverage could actually be higher than the 30 percent estimate that Gallagher Re is putting out right now,” Friedlander stressed in a recent NBC News article.
Homeowners in the area had plenty to say about the possible increase in the NBC News article:
“I would love to stay in Florida, but I think the reason I don’t want to is because homes are way more expensive,” said Sasank Kaneipati of Fort Myers. Kaneipati who is 23, said in the NBC News article that he can’t afford to purchase a home due to taxes and insurance costs and believes many people his age are in the same boat.
“It just sucks for consumers because it makes everything a monopoly, and you can’t get out of it,” Kaneipati said in the NBC New Article.
Jodi Kaplan who was also quoted in the NBC News article, she is a Southwest Florida broker and realtor and is seeing firsthand how the cost of insurance is impacting homeowners. “People have to move out of the state because they can’t afford to live here,” Kaplan said in the NBC News article.
“I think the reality is you get a lot of people here, and they find out, wow! My insurance is more, my property insurance taxes, and we can’t make ends meet,” Kaplan stated in the article.
Ted Murphy who lives in Fort Myers and owns two homes in the city was also featured in the NBC New article. One of his homes is a rental, and he is feeling the rising costs. “The insurance has gone from $1800 four years ago to $2800 to $3400… so yeah, it’s affecting everything,” Murphy explained in the article. He may end up leaving the state if insurance costs continue to rise. “When everything is fixed up, maybe we’ll think about selling,” Murphy predicted.
Murphy is not alone, the average cost for homeowners insurance in Florida currently runs over $6,000 a year.
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