‘Going up and up:’ Here’s how rising reinsurance rates are impacting Florida’s homeowners
ORLANDO, Fla. – Property insurance rates will likely continue to climb in Florida.
A global market analysis report released three times a year confirmed reinsurance rates increased by double digits on July 1.
Those increases are typically passed along to consumers, according to industry experts.
Gallagher Re, a global reinsurance broker which doles out insurance for insurance companies, has been raising rates because of steepening losses, analysts said.
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The company releases its report three times a year during key renewal seasons—Jan. 1, April 1 and July 1.
Its latest report shows the cost of U.S. property catastrophe reinsurance in Florida rose as much as 40% this month, and it’s happening as more insurers are leaving the state.
Sara Moore is one of 100,000 people in Florida, insured by Farmers Insurance, who are now looking for coverage after the company announced suddenly last week it is leaving the state.
“I was completely shocked. I had no prior knowledge of anything,” Moore told News 6.
Last Tuesday, Moore got an email, not from Farmers, but from her insurance agent notifying her that the company made the decision to “non-renew all lines of business in the state of Florida,” according to the email. “Just like you, we found out this news today.”
“I was pretty disappointed. I was disheartened. I was disgusted,” Moore said. “I didn’t know what I was going to do, like the rest of everybody else.”
It means more people looking for insurance in Florida at a time when it can be difficult to find and expensive to do so.
“First of all, I have two properties to insure. You can’t be homesteaded on two properties,” Moore said. “I have never gotten a break. Everything keeps going up and up and up.”
And it’s likely going up more.
Gallagher Re released its July report showing reinsurance rates for policies which previously faced claims for natural catastrophes rose 30% to 40% this month.
“Overall there was sufficient supply of capacity to clear renewals, albeit at meaningful price increases now compounding over several years,” the report shows.
Florida Chief Financial Officer Jimmy Patronis is aware.
“Reinsurance is running into the same problems regular insurance is,” Patronis said. “I tell people all the time, ‘If your insurance rates on your home have not gone up 50% in the last two years, you don’t own a home.’ So, it is affecting every single person in the state, but again not just the state it’s the whole nation.”
But it seems to be hitting Florida harder than most.
According to the Insurance Information Institute, the average cost of property insurance in Florida this year is $6,000, a 42% increase year-over-year.
The average U.S premium is $1,700, 11% higher than in 2022.
Consumers like Moore know it all too well.
“If they’re going to jack it up that much more, I’m done,” Moore said.
Industry analysts said those impacted will likely start to see the increases on their next renewal.
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Source: WKMG News 6 & ClickOrlando
