The short answer to that question is, "yes." I've been doing this insurance thing for 30 years, and I've seen a lot of craziness in my business. Quite honestly, though, I've never seen anything quite like this. The price to insure your home here in the Sunshine State has, on average, doubled since 2020. Some folks have been luckier than that, but some have seen even larger increases. It's brutal. It's even worse, in my view, on the commercial insurance side. Some business owners are not only seeing price increases, but having a hard time even finding wind coverage, particularly for older buildings close to the water.
So, what's the deal, and when will the beatings stop? Well, the deal is that Florida home insurers have lost more than a billion dollars each of the last three years. That's not a great business model, obviously. The problem, oddly enough, isn't hurricanes. It's lawyers. We've had some unique laws here in the state of Florida that have allowed a few law firms and roofers in Central and South Florida to take advantage of the system and run costs up. Only about 8% of claims dollars go to the homeowner, with the rest going to attorneys! Florida has about 9% of the claims in the US, but 79% of the lawsuits. (All of this is government data.) When you have $30,000 and $40,000 claims that carry a six-figure legal fee, something doesn't add up. Furthermore, these parasites continue to move north in our state, and what was once a "Miami problem" now infects us all.
Well, the good news is that this litigation glitch was fixed in the last legislative session. Gov. DeSantis has signed bills limiting this lawsuit abuse, as well as other bills that should improve insurer accountability. Really all that's left is for the various state agencies to tighten up enforcement of existing laws that protect homeowners. So, these huge premium increases should be pretty much behind us very soon. That said, the insurance industry is a big beast, and it takes longer to turn an aircraft carrier than a bass boat. One issue is existing litigation. Just before the legal fee reform passed the legislature, these opportunist lawyers in S Florida raced to county courthouses everywhere, and they filed more than 280,000 lawsuits (best estimate I could find) in a matter of days. It will take a minute to get those resolved.
The better news is that I'm seeing bright spots. That light at the end of the tunnel is still a pinhole, but it's there. Over the next year or so, I predict things will get materially better. Rates from reinsurers (the mega-insurers that sell insurance to "regular" insurance companies seem to have peaked, and there are even some new companies filing to do business in Florida, encouraged by the legislative changes that were just passed. So, my hope is that we're on the back side of the hurricane now, and while the wind is still blowing, the eye has passed over.
Meanwhile, as an insurance buyer, you can do a couple of things. You can look at getting a wind mitigation inspection. You can adjust coverages and deductibles on your existing policy, and you can go shopping. Also, it might not hurt to pray for a mild hurricane season this year, not just for Bay County, but to the whole state. Still, be sure to stock up on water, batteries, and other hurricane supplies just in case.
