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Storm: One of the causes of high property coverage premiums in Florida

What Factors Cause Florida’s High Insurance Rates

Storm: One of the causes of high property coverage premiums in Florida

What Factors Cause Florida’s High Insurance Rates

By David Thompson, AAI, CPCU, CRIS

Executive Summary

  • In 2022, almost 1,200 people per day moved to Florida. They brought more vehicles here, drove more miles, and caused more accidents that resulted in more claims costs to insurers. They built more new houses that increased the “structure density” in the state, resulting in increased claims payments from insurers.
  • Going back to Hurricane Andrew in 1992, hurricanes have cost insurers hundreds of billions of dollars. Florida is “hurricane alley.”
  • Florida accounts for nine percent of homeowners insurance claims countrywide, but 80 percent of the litigation. People like to sue in Florida, which has been termed a “judicial hellhole” by some organizations.
  • Reinsurance costs for insurers have increased dramatically. These costs are passed along to consumers.
  • About a dozen insurers have become insolvent in the past few years. These costs are passed along by the guaranty association (FIGA) to consumers.
  • Florida has a long history of a favorable court system for plaintiff attorneys.
  • Seasonal residents with multiple homes and cars must weigh the benefit of that luxury.
  • Inflation of building costs over the past few years has resulted in increased claims payments.
  • Abuses of assignment of benefits resulted in increased claims costs by insurers.
  • Florida’s pure comparative negligence concept, unusually long claim filing deadline, and the favorable (to plaintiff attorneys) bad faith claim concept caused insurance premium increases.
  • Some of the legislative reforms passed in 2022 and 2023 have already resulted in some favorable responses by insurers. The actuarial data will take several years to come in and there will not, most likely, be any immediate rate relief.

Full Blog Article

Whether it’s auto or home insurance, price is a significant consideration with any household budget. This article should help you understand some of the factors involved in insurance pricing and how they can impact your premiums both present and future.


Every single day, approximately 1,141 people move to Florida. Last year (2022) the total was 416,000 new residents.

Between 2010 and 2021 just under 3 million relocated here, adding more cars to our roads, building more houses and condominiums. Our “Sunshine State” appeals to millions of “snowbirds” and it’s not just the sunshine–we also have no state income tax and a pretty good reputation for being a fun place to live and retire.

NOAA (National Oceanic & Atmospheric Administration) reports that 76.5 % of Floridians live in high-risk coastal areas. One example, in Indian River County, the population increased by 36 percent from 2000 to 2021. Records show 7,834 building permits were issued for single family houses and 1,192 were issued for multi-family projects.

While such massive growth may increase the tax base, it also places more residents in areas where cows and citrus trees used to be. And, according to Swiss Re, virtually all of them are required to have insurance which, according to the Insurance Information Institute (III), costs four times the national average in Florida.

When these factors and those that follow are combined with Florida’s traditional inclination for frivolous litigation, including the national distinction as a “Judicial Hellhole,” the result is higher premiums for everybody. Legislation passed in 2022 and 2023 has already begun to stem the tide of lawsuits (see “LITIGATION” below).

The following are some other factors contributing to Florida’s insurance rates.

REINSURANCE: Just like consumers buy insurance to protect their financial assets, insurance companies buy such coverage (called reinsurance) to help fund catastrophic losses. Florida is the world’s hurricane highway with some of the worst storms in history like Andrew, Opal, Charley, Ivan, Jeanne, Frances, Wilma, Irma, Michael, Sally, Ian, Nicole, Idalia, and more. Hurricane Ian damage reports have been over $65 billion. Reinsurance costs have increased drastically over the past decade and usually average from 40% to 60% of a homeowner’s entire premium. In one 18-month period in 2004 and 2005 Florida averaged one hurricane every 60 days.

INFLATION: The inflation rate for all goods and services over the past 15 years is higher than historical levels. But remember that insurance claims are paid based on “replacing” damaged property not the purchase or sales price of a house. While prices are constantly in flux, some reports show construction costs have increased by 19 percent since pre-pandemic levels. Combine that with what is often termed “demand surge” after a hurricane and it’s clear that insurers are paying out significantly more in property losses, especially those related to catastrophes.

INSOLVENCIES: Some would say this one is more of a symptom than a problem, especially for property insurance. None the less, a dozen insurance property carriers have failed in the last five years—a statistic not found in any other state. Insolvencies must be funded, and claims must still be paid, usually by assessing other insurers via the Florida Insurance Guaranty Association (FIGA). This and other assessments are reflected in Florida homeowner rates.

SEASONAL RESIDENTS WITH MULTIPLE HOMES: Many Florida residents own secondary homes in another state. The reality is that the luxury of owning multiple homes and multiple cars in multiple states comes with a price. Such residents must weigh the benefits of this arrangement because paying premiums on multiple homes is similar to paying taxes and utilities in multiple states.


In 2021 there were 42,939 highway accident fatalities, the highest number since 2005 when fatalities began to fall. More people are driving more miles, causing more accidents.

In the same year, 31 percent of the fatalities were alcohol related, and that figure increased by 14.2 percent over the previous year. One report stated that Americans purchased and consumed more alcohol during the pandemic than in years past, leading to more accidents and fatalities.

Long gone are the days of going to the auto parts store and getting a headlight for $10.00. Today’s technology-equipped cars cost a lot more to repair. Because repairs for electric cars are about double that of gas cars, their insurance also costs more. Supply chain issues have led to price inflation on used cars and the price of repair parts. It’s not unusual for a simple rear end collision to cost over $5,000.

III estimates that over 20 percent of Florida automobile owners carry no insurance. A few years back, the Florida Office of Insurance Regulation (OIR) published a report showing that of the cars with “any” insurance, 51 percent had liability coverage of $25,000 or less. Thus, uninsured motorist coverage is critical to carry, and the cost of that specific coverage has increased dramatically for the same reason.

One major national insurance company recently reported that its auto premiums will have to increase 20-25 percent a year until 2025. Some of Florida’s tort reforms may help, of course. And there is currently an effort to repeal Florida’s No-Fault law which might also have a salutary impact on rates.

LITIGATION: According to data from the National Association of Insurance Commissioners (NAIC), while Florida accounts for only 9% of the homeowners claims in America, it is responsible for close to 80% of America’s property lawsuits. Litigated claims cost 5 times more than non-litigated claims.

This obviously out of control problem resulted in the most comprehensive tort reforms in Florida’s history. After these reforms passed but before they became effective notices of lawsuits were filed to avoid the reforms. Under normal circumstances Florida would experience close to 120,000 annual property suits. After the reforms passed, but before they became effective, close to 280,000 notices of litigation were hastily filed to avoid application of the reforms. For a period of time the cost of those suits will be reflected in rates.

Here are just some of the tort reforms that will largely relieve the costs of frivolous homeowner litigation going forward.

Assignment of benefits: In an “AOB” action, a homeowner might sign a contract with a water remediation company, contractor, roofer, or automobile glass shop. In “layman’s terms” this could be viewed as giving a power of attorney to a third party to represent the customer. While AOBs by themselves are not bad, abuses lead (in part) to fraudulently inflated claim payments, legal costs and thus, higher premiums. An unscrupulous AOB contractor might inflate a damage repair estimate, file a claim and demand payment. When the insurer objected to that amount, based on their own damage repair estimate, the AOB contractor filed a suit. Recent tort reforms prohibit the use of AOB’s for personal and commercial residential policies, with a few exceptions. Likewise, in 2023 the legislature passed legislation prohibiting AOB contracts relating to windshield glass damage.

Contingency Fee Multipliers: Most plaintiff attorneys take a case based on a contingency arrangement, meaning the customer pays nothing unless they win in court. The court will look at the specifics of the case and award attorney fees based on the “lodsestar” method–the number of hours spent on the case multiplied by an hourly rate.

A “multiplier” can be applied of up to 3 times the lodestar rate. Florida was the only state that did not follow the U.S. Supreme Court standard of applying a fee multiplier only in “rare and exceptional” cases. The reforms repaired this anomaly.

One Way Attorney Fees: Florida has a long history of generously awarding fees to plaintiff attorneys. In cases where the insurer offered a settlement amount and the court awarded just $1.00 more, the plaintiff attorney was entitled to their fees. Legislation in 2022 and 2023 made material modifications to this concept removing a major incentive for so many frivolous suits to be filed.

Comparative Negligence Changes: States differ in their system of negligence. In some states, called contributory negligence states, if (as an example) a driver is just five percent at fault in an accident, they can recover no money from the other driver because they “contributed” to the negligence. Florida, until 2023, was a “pure comparative negligence state.” The fault of each party was “compared” and each party recovered based on the degree of negligence. For example, a driver who was 80 percent at fault could still collect 20 percent of their award from the other party. Based on the 2023 legislative changes, if a party is more than 50 percent at fault, they cannot recover from the other party. Again, this will result in fewer frivolous lawsuits.

Statute of Limitations For Negligence Claims: The legislative changes in 2023 reduced the timeframe to file a negligence suit from four years to two years. This will result in fewer lawsuits over time.

Bad Faith Claim Reforms: An insurer can be accused of not settling a claim “in good faith” by misrepresenting facts or failing to comply with policy and/or statutory provisions. As such, they can be found to act in “bad faith” and can face substantial monetary penalties. For example, one change would require that the insurer be found not to have paid a claim or to have underpaid a claim before a bad faith claim can be filed. Prior to the reforms an allegation of bad faith was the norm even prior to an adjudication of guilt.

Other legislative reforms were also enacted during 2022 and 2023 that will have a salutary impact on rates going forward. Some are already having a favorable impact. See Glimpses of Optimism.

For complete information on all the legislative changes see the report from Florida’s Insurance Consumer Advocate.

I would also recommend buying a copy of Scott Johnsons’ book, Collapse of an Evil Empire, which has been endorsed by numerous legislative leaders and explains what was going on behind the scenes with respect to litigation.


For homeowner’s insurance…

  • When buying a new home make sure it’s built to the current state and local building code. Obtain a wind mitigation report (About $125) so that all credits can be applied.
  • Check with your insurer or agent to confirm you’re getting all appropriate discounts. Examples are new house credits, multi-policy credits, claims free credits, gated community credits, and other assorted discounts.
  • Keep your roof and water heater current. Many insurers balk at ages over ten years.
  • Take a proactive approach to claims mitigation. For example, consider turning the water off when you leave town for even one night, and regularly inspecting all water connections under sinks, toilets, washers, and other parts of the house. Non-weather-related water claims are the number one cause of loss for homeowners.
  • Replace washer hoses every five years, even the upgraded metal hoses. Install impact glass or shutters and secure them even for a minor hurricane.

For auto insurance…

  • It is very important to maintain a good driving record and credit history. Check with your agent about potential discounts for taking a defensive driving course.
  • Bundle your auto insurance with your homeowners insurance whenever possible. With some insurers the savings can be as high as 20%.
  • As difficult as it may be, avoid expensive cars that cost $75,000 or more. Look into tracking device discounts that verify good driving habits but… be aware of what data is collected.
  • To avoid problems during the term of your policy, make sure your insurer/agent knows about all household residents regardless of age but especially teenagers whether of driving age or not.


Be cautious when moving to a new insurance company based solely on price– a lower premium can be due to lower coverage.

Also, an insurance company can cancel a new policy for any reason within the first 60 days with just a 20-day notice. This “free look” period is used to conduct inspections (inside and out) and to check prior claims, residents in the household, credit ratings including past bankruptcies and more.

Information discovered during that first 60 days can, at times, lead to a mid-term cancellation making it difficult to find replacement coverage or to return to your previous carrier. This is also true for auto insurance.


Originally posted on Johnson Strategies, LLC

Insurance experts say knowledge is power

(Insurance) KNOWLEDGE is Power!

As insurance professionals, our job is to educate and guide our clients. We have always strived to share our knowledge and experience with all of our clients. We want you to be knowledgeable, so you can make an INFORMED decision when it comes to YOUR insurance. This is what makes us different!

How do you stay informed? READ! Ask Questions! We send out monthly newsletters/blogs with important updates on the Florida Insurance Industry and helpful reminders! Your policy documents also include a lot of helpful information. We are also always available as a resource!

EVERYTHING INSURANCE RELATED IS ALWAYS TIME SENSITIVE! Received an email or letter from your insurance company or agent (our office)? Open it and read it thoroughly ASAP! Communication about your insurance is ALWAYS time sensitive and needs your immediate attention!

We are Small but MIGHTY!

At Mizrahi and Garris, we focus on QUALITY! Details matter, especially when it comes to insurance.

With many changes in underwriting guidelines, it is radically important that each client’s file is thoroughly reviewed with the necessary time needed to be accurate.

As such, reviewing and quoting is not a quick process – we absolutely appreciate your patience as we give each client the time and attention they deserve.

Teamwork Makes the Dream Work!

-When it comes to your insurance, you must have an ACTIVE role. Help us, help you! This is a TEAM EFFORT! We need you to be an active participant in your policy. We work together to make sure you are protected!

-Keep track of your policy term dates. Renewal offers are typically sent out 30-60 days before your renewal date. We recommend marking your renewal date on a calendar and marking a renewal reminder about 45 days beforehand, to make sure you are on the lookout for the renewal offer documents. Since there can sometimes be issues with the post office or your email marking it as spam, this is a good way for you to be sure you receive your paperwork. If you haven’t received it, please reach out to us to inquire!

Review your renewal offer. When you receive your renewal offer, open it immediately! Read through the documents to learn of any updates noted. Call or email us if you have any questions/concerns about the policy, need to make any changes, or want to discuss the rate!

Need a Payment Reminder? Just ask! We’re happy to set up a one-time/recurring payment reminder in our system for you!

-Has your mortgage changed? Be sure to let us know! Do not assume the mortgage company will tell us – most of the time, they don’t. If your mortgage information isn’t updated on your policy, you put your renewal at risk of not being paid and your policy being cancelled or lapsed.

Stay in contact! When requesting a quote or policy changes, please be sure to stay in contact with the assigned agent that is working on your file. Sometimes additional information is needed and we will reach out via the contact information you provided/confirmed – by phone, email, or text.

20th anniversary of insurance agency in Jacksonville FL

Happy 20th Anniversary!

20th anniversary banner for local independent insurance agency

A lot can happen in 20 years...

2002 feels both like it was just yesterday and also a lifetime ago. To give you a better sense of that, here are some things that happened in 2002:

  • The first Spider-Man film staring Tobey Maguire was released in theaters.
  • Lilo & Stitch made its debut.
  • Kelly Clarkson won the FIRST season of American Idol.
  • Kmart filed for Chapter 11 Bankruptcy.
  • President Jimmy Carter was awarded the Nobel Peace Prize in October.
  • The first cell phone to have a built in camera was released Sanyo SCP-5300 (it would take another 5 years for the iPhone to be introduced to the world!).
  • Dennis and Betsy started Mizrahi and Garris Insurance Agency!

Thank YOU for Trusting Us!

We would not be here without our wonderful clients, so our first THANK YOU is to each and every one of you! Our largest growth and referral source has always come by word of mouth from our current clients. We think that is HUGE! It shows that not only do our clients trust us with their needs, they also trust us to help their family, their friends, and their neighbors.

To our special referral sources (many of whom are also clients) - realtors, mortgage brokers, loan officers, financial advisors - THANK YOU for trusting us with your clients and recommending our knowledge and expertise to them!

Your confidence in us has allowed us to flourish to new heights. It keeps us engaged in continuing education, current news and trends, and future plans on how we can best serve our clients. We look forward to guiding you for many, many more years to come.

Our work family: Crystal, Carla, Bri, and Liz - have all given years of dedicated excellence to our clients. Dennis and Betsy, we are beyond grateful for your leadership, insight, and being with us daily in the trenches as the insurance industry gets tough. We all could not ask for a better team to be part of!

Words from Dennis

Starting our agency was SCARY, yet exciting all the same. I had been working at Liberty Mutual having just learned the intricacies of the insurance industry and felt it was a good opportunity to start my own agency. Being the grandson of an INCREDIBLE Grandfather and mentor named Ralph Mizrahi, it was “in my blood” with my entrepreneurial energy. When my grandfather passed away, it truly hit me. Our second daughter had just been born, Betsy was downsized from a large corporation, and my mother-in-law, Alo Garris, was also “downsized” by a HUGE corporation around the same time. It just felt it was a great window to go out on my own.

I spent about a week thinking about it and came up with an internal 45-minute message to explain to Betsy how great of an opportunity I thought we had. About 5 minutes into my conversation with her, she said “Let’s do it!” I hesitated for a few seconds, feeling like I had so much more to explain. When I tried to, she cut me off and continued to advise that she was ALL IN. We both had the vision and goal that “Failure is not an option.” We never looked back.

It was very difficult living on credit cards and a small savings during the first 3 to 5 years. I will never forget going through the grocery, being denied with my debit card, and calling Betsy asking her which card to use. It was very difficult with two young children, but we were dually committed to make this agency work.

When things started opening up for us, we hired several individuals. Some stayed, some left, but after many years of building our current team, I look back and see how we have impacted so many lives. We try to live our lives honestly with high morals and integrity. We have shared this passion with our team, and it absolutely thrills me to see that everyone who works for Mizrahi & Garris owns a home. That’s huge! I feel Betsy and I truly give back to society and try to make this world a better place. That’s been my personal goal since the day I entered the insurance industry and continues to be my passion.

Words from Betsy

20 years ago...WOW!!

In September 2002, I was 33 and Dennis was 32. Our daughters, Rachel and Evelyn were 6 years old and 10 months old respectively. Even though both Dennis and I had business degrees, neither of us had ever run a business and we only had a small savings to get us through the first year. It was very much like jumping off a cliff for us.

In the beginning, my role was gathering information and returning phone calls, while Dennis wrote the insurance policies. Back then, everything was on paper and notes were taken inside the clients file folder. We worked out of a shared 450 sq. ft. office space for the first year, then moved to a 2 room office the next year, and a 3 room office the year after.

In looking back at how I have grown, I would say that, in the beginning, customer service was VERY difficult for me. I tend to “feel” what my client is feeling, and I had difficulty channeling those emotions. Now, I am able to empathize with our clients while at the same time helping them to find resolutions to their issue(s) in a way that is healthy for both of us. I TRULY ENJOY talking with and helping our clients!

I am not proud person, but I am VERY proud of the fact that this agency supports 5 families! Dennis and I are the original owners, but we would like you to know that WE are here every day working alongside our work family, Crystal, Liz, Carla and Bri. If you ever have to leave a message with our busy agency, I apologize in advance for not being able to take your call immediately. We take much time with each client, and just like it was 20 years ago, you will most likely hear back from me, the message checker!!

Protecting Our Clients is Priority!

From Dennis: My favorite memories have definitely been the conversations with our longest clients thanking us for taking care of them all these years. It’s just so wonderful to have a positive impact on everyone who truly understands what we try to do. It’s not about “selling” a policy.

To me, insurance is about being involved, educating my client, and advising and insuring them the same way I would want to be advised and insured. There is so much dishonesty and a lack of trust in so many facets of society. I feel we have been truthful to our clients, carriers, and ourselves through this entire history and nothing will change that. That’s my fondest feeling I get when looking back all these years of PROTECTING our clients.


Client insurance expert diagram

What is the Role of an Insurance Agent?

As your agent, our primary goal is to learn your specific insurance needs, and help guide you to the right policy. We help facilitate the connection with your insurance carrier. We will usually be your first point of contact.

Not only do we quote insurance, we will continue to service your policy. It doesn’t just get passed along to a call center – we stay familiar with your file! From assisting with taking payments, providing copies of your policy documents, to researching and answering any insurance questions or assisting with policy changes- we can help with all of this!


Insurance Agents have very specific licenses that are administered by the state. With our license, we also complete Continuing Education classes to keep up-to-date on new trends and changes in the industry.

As growing experts in our field, we share our knowledge by educating our clients. We help explain what coverages mean, what insurance is designed for, and help anticipate future insurance needs.


One thing that makes us stand out from other agencies is our close relationships that we have built with the insurance carriers. We work closely with their underwriters and meet regularly with their marketing representatives, which helps us build a solid partnership with the carriers. This allows for open communication, possible exceptions, and better policy management.


We are always here to advocate for our clients! If you find yourself in a potential claims situation, we recommend calling our office first. We will help our clients determine a plan of action, find out what may be needed, and what to expect during the claims process. If you have any issues during your claims process, we can help communicate that to the insurance carrier as well.

Building a Relationship with our Clients

When you call our office, you are not calling a call center and you are not just a policy number to us. We love getting to know our clients and their families. It is always the best testament to our service when clients recommend our office to family and friends. This shows how much trust our clients have in us!

Dennis and Betsy, who started Mizrahi and Garris, are very active in our office – helping with calling back client’s voicemails, reviewing coverages to make recommendations, and quoting policies. It was important to them to build a solid team who they could trust to help our clients. They have found that in Crystal, Carla, Bri, and Liz! We are all just a phone call or email away and always happy to help!

We are Local!

Why does this matter? Having a local agent helps tremendously! Because we know the area, we know local trends. We can help warn against predatory contractor behavior and fraud that we’ve witnessed. We can help with trusted local recommendations – maybe you need a good plumber or electrician? We all know how hard it can be to find a trusted contractor that we feel confident in to allow into our homes!

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