Jacksonville Insurance Agency Identifies Causes of Florida Insurance Premium Increases

As premiums for both home and auto insurance rise, and the rate that they have been increasing for Florida residents accelerates, there is a need for answers as to why this is happening and what the average Florida insurance buyer needs to know to help mitigate these costs. “Florida residents want to know why their insurance premiums increase by leaps and bounds,” says Dennis Mizrahi, President of the Mizrahi and Garris Insurance Agency. “In addition to the price hikes, good coverage is harder and harder to find.”

Dock needing property coverage in Jacksonville, Florida

Here are some contributing factors to Florida’s rapidly rising insurance coverage costs.

Causes of Increasing Insurance Rates in Florida

Scope and Frequency of Storms, Wildfires, and Other Disasters – The increase in the power, area of impact, and frequency of global weather events complicated by global warming over the last decade has put a tremendous strain on the global insurance industry.

Florida’s Exposure to Damage – Most of Florida lies within an “at-risk” area for flooding, wind, and water damage from severe storms and hurricanes. This creates an area where the risk of damages is very high, making reinsurers reluctant to sell to insurance agencies in Florida.

Roof Targeting – Loopholes in Florida statutes have allowed disreputable attorneys to collect five times the value of a roof replacement claim if an insurance company “settled.” This caused a $20,000 roof claim to cost the Florida insurance carriers $120,000, with the homeowner getting very few (if any) of those dollars.

Supply Chain Issues and Inflation – During COVID, supply chain issues dramatically increased some home-building supplies, and the lack of components drove up automobile costs. The post-COVID inflation surge has caused further turmoil in the markets, ultimately impacting reinsurers.

Reluctant Reinsurance Carriers – The combination of all the causes listed above caused many reinsurance carriers to pull out of Florida, creating severe strain on the remaining reinsurers within the state around the first quarter of 2022. Then, the remaining reinsurers got hit hard by claims stemming from Hurricane Ian later in 2022. As a result, many Florida carriers could not pay the high reinsurance premiums, which forced them to close or put them into receivership. The remaining carriers had to pass the higher premiums to policyholders.

“These issues have made getting insurance that provides appropriate coverage without emptying your wallet challenging,” says Mizrahi. “During this time, you must select an insurance agency that understands the market factors, the coverage available, and the specific plans necessary to protect you if a catastrophe occurs. You need an insurance expert to help you navigate the complex and confusing process.”

Get an Insurance Expert to Help You Navigate the Complex Florida Insurance

For over 20 years, the insurance experts at the Mizrahi and Garris Insurance Agency have served individuals and businesses in the Jacksonville, Florida, area, including St. Johns, Yulee, and Nocatee. Call us at (904) 262-9202, email us at Dennis@InsuranceMG.com, or click our Free Quote button on any page on our website.

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