Florida’s homeowner’s insurance crisis may worsen as more companies go under

WEST PALM BEACH, Fla. – Since Florida’s federal court system began in May, little has changed in reducing homeowner’s insurance premiums.

Since January, 400,000 Florida homeowners have been dropped by their insurance provider or have received non-renewal letters.

Also, 275,000 homeowners had to find a new insurance provider because their companies defaulted on their loans.

This week, the Insurance Information Institute revealed that 27 other companies have been downgraded by Demotech, an organization that rates insurance companies.

SPECIAL REQUIREMENTS: Protecting Paradise

This could reveal many companies are on the brink of default, adding to what is being described as a Florida homeowner’s insurance problem.

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Helen Kruger of Stuart, Florida, said she was “pleased” with the increase in her home insurance premium this year, even calling an agent to see if it was a mistake.

The Insurance Information Institute reports that Florida homeowners pay nearly three times as much in annual insurance premiums.

The agency says Florida homeowners pay an average of $4,321 a year while the average annual home insurance premium is $1,544.

The reasons include increased roof fraud, runaway lawsuits and rising home repair costs, according to the Insurance Information Institute.

Citizens Insurance, the government-backed insurance company, is close to reaching one million. It was half of that two years ago.

Mark Friedlander with the Insurance Information Institute said the current model cannot continue.

“This is getting worse every day. Citizen development is not possible at all. Last business, state-run insurance of last resort should not be the main option for homeowners. It should mean the last resort, the last chance. Not the first and only chance to get help,” said Friedlander.

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Insurance companies writing policies in Florida took more than $1 billion in writing losses last year.

The Insurance Information Institute says that the repeated occurrence of roof replacement scams is exacerbating the problem.

In this way, contractors approach homeowners with the opportunity to replace their entire roof by signing a letter of offer.

This gives the contractor full rights to negotiate with the insurer, leaving the homeowner out of the job.

Those contracts raise the cost of roof repairs by thousands of dollars.

Insurance companies try to challenge this in court, spending a lot of money on lawsuits and fines.

This has become so common that insurance companies have started offering homeowners a higher annual premium.

This led to insurance companies dropping customers who were considered elderly, some with more years of life and stamina.

That’s one thing the State Legislature can do resolved in the special session of May.

Now, homeowners can inspect the roof if the inspector can confirm that there is at least five years remaining; The insurance company can’t just drop you on the ceiling for your age.

Insurance agent Lee Wiglesworth, who works in Palm Beach County and the Treasure Coast, sees some insurers accepting the letters to appeal non-renewal letters.

However, Wiglesworth said insurers are now looking at the age of the entire building as a reason not to accept new customers.

That could be a problem for thousands of local customers who were outed earlier this year and are looking for new service during the storm.

“Now that they can’t build that roof, we’re looking at years of construction, sometimes,” Wiglesworth said. “I just asked the staff what we could do to get a full, storm water system in Palm Beach County based on the age of construction and they said 2010 or newer.”

For those who haven’t been let down by their insurance company, budgeting around the big jump has been difficult.

Helen Kruger of Stuart has a steady income. His annual salary rose to about $1,800.

“Well, I was very surprised. I called the insurance company and asked them if it was a mistake because I had nothing to say. I have the equipment to lock the Category 5 hurricane in the house around, forever. They are not going anywhere,” said Kruger.

A special meeting of the state constitution led to the opening of the My Florida Foreclosed Home Program.

If appropriate, a free home inspection can identify other changes to your home. Eligible homeowners may also receive grants to help with wind mitigation repairs.

To save on your annual cost, landlords should also review their property information sheet and especially their total replacement cost.

Lowering the price can save hundreds of dollars in annual costs.

Also, the upfront cost of installing affected windows and garage doors can add up to a lot of money.