TAMPA, Fla. — The cost to live here in paradise has gone up drastically since the pandemic began. Hundreds of thousands of people are moving to the Tampa Bay area, and home prices are rising faster than in California and New York, according to Case-Shiller Home Price Index.
But there’s another cost to owning a home that’s been getting worse over the years here in Florida — insurance.
Seven property insurance companies in Florida are now in liquidation and many residents are seeing bills nearly triple what they were two years ago.
Most residents with homes under $650,000 have what’s called “last resort” state-subsidized Citizen’s Property Insurance.
Hudson resident Elizabeth Roache's yearly premium with Citizens was $769 back in 2019. It went up to $1,500 last year, and this year, it’s $1,932.
“That is almost three times as much as it was two years ago,” Roache exclaimed. “And it really just makes you wonder, okay, what is going on here?”
According to insurance.com the average home insurance cost in Florida for a $300,000 home is $3,600 which is about $1,300 more than the national average.
We went to veteran insurance agent Kathy Walsh, who owns Coast to Coast Insurance in Tampa, for answers.
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“The reason is due to all of the fraud that we've seen going on in Florida. There is an organized undercurrent of roofers, public adjusters, attorneys, and salespeople canvassing neighborhoods. About the roof on your house, even though it’s end of life, even though it's a 24-year-old roof and it's only good for 20 years, ‘we can get you a new roof put on by your insurance carrier,’” she explained.
That’s exactly what’s happening in one Seminole Heights neighborhood.
“I turned around, I looked down between our houses, and there was a ladder up against my roof and it was a guy about to step onto the roof, and I said, ‘Hey, what are you doing?!’” exclaimed homeowner Brian Curry.
He and his neighbor Rebecca Williams say roofing companies are constantly knocking on the doors in their neighborhood with homes built in the 1920s.
“They had knocked on my door. ‘Oh, we can tell you need a new roof.’ I said ‘Really? How can you tell that, you haven't even been on it?’” Williams said. "'Well, you know, we're coming around the neighborhood.' And I said ‘Sure you can go on my roof'… It just became such a hardcourt press like, ‘Do you want to do it? Do you want to do it?’”
Even after she said no, Williams received a voicemail from the man saying, “just wanted to see if you were ready to get the ball rolling on your new roof, give me a call back at your earliest convenience.”
While her roof is almost at its end of life, Williams said she’s too scared to get it replaced for fear of her homeowners' insurance going up.
Walsh said these companies get the homeowner to sign an assignment of benefits or AOB, allowing the roofer to deal directly with the insurance company, often claiming storm damage and ending up in court.
“Florida makes up 10% of all insurance claims nationwide,” Walsh said, “But we are 76% of lawsuits nationwide.”
According to Guy Carpenter Industry Reporting, property insurers had $1.22 billion in underwriting losses from January to September of 2021 — that’s money lost in addition to paying out claims.
As of the last week of March, seven agencies in Florida are in liquidation:
- American Capital Assurance Corporation
- Avatar Property and Casualty Insurance Company
- Florida Specialty Insurance Company
- Gulfstream Property and Casualty Insurance Company
- Sawgrass Mutual Insurance Company
- St. Johns Insurance Company
- Sunshine State Insurance Company
Lexington Insurance also joined the list of companies pulling out of the Florida market and those that are still hanging on, like Lighthouse Property and Florida Farm Bureau both had their financial ratings drop due to losses.
Walsh said it’s crucial that Florida pass legislation on cash value roof replacement.
“Mortgage lenders and mortgage requirements have required, especially if they're government-subsidized loans, that they have to be 100% replacement cost on the roof,” she said. “Needs to change to actual cash value, where it's a depreciation at five years, 10 years, 15, 20 years of the roof, it needs to be a depreciating scale.”
In February, Tampa Bay Senator Jeffery Brandes tweeted about the rapidly growing issue.
HB 7065 which would have limited some annual rate increases under Citizens Property Insurance and promoted more cash value roof replacements died in the state House of Representatives when the last session ended in March.
The burden is heavy on Citizens, especially if major storms hit Florida this hurricane season. The Florida Office of Insurance Regulation held a hearing Thursday, March 31, to hear a proposal from Citizens on a rate hike of nearly 11%, the highest increase allowed by law. They have not announced their decision yet.
We reached out to Governor Ron DeSantis’ office to ask what they’re doing now.
His Deputy Press Secretary Bryan Griffin responded stating: “The governor is monitoring the stability of the insurance market in real-time, and closely working with Commissioner Altmaier (Office of Insurance Regulation) to find solutions to rising insurance costs.”
In July 2021, DeSantis signed SB 76, prohibiting contractors from soliciting a consumer to repair their roof through an insurance claim and offering roof inspections. It could take about two years to see its effects.
Governor DeSantis called for a special session in April to redraw the congressional district, it will not be for property insurance.
Under Florida law, the president of the Senate and the speaker of the House of Representatives can also issue a joint proclamation convening the Legislature. Another option is if 20% of legislators petition for a session and three-fifths of both chambers approve and set the date.
On Tuesday, Brandes told ABC Action News he would be sending a letter to the Senate and House leadership calling for a special session.
Tips to save on homeowners insurance:
- Renovate your home
- Improve your credit score. If you need help, you can sign up for ‘Experian Boost’ to add cell phone and streaming payments to help boost your credit score
- Bundle home and auto insurance
- Increase your deductible
Click here for more tips from Bank Rate.
Full Statement from Governor Ron DeSantis office:
"Governor DeSantis remains committed to the goal of stabilizing insurance rates and continuing to work for the consumer. The governor is monitoring the stability of the insurance market in real-time, and closely working with Commissioner Altmaier to find solutions to rising insurance costs.
In 2019, 8.6% of all property insurance claims in the U.S. were filed in Florida, yet 76.45% of all property insurance litigation in the U.S. occurred in Florida.
Recognizing this, during the 2021 legislative session the Legislature passed and Governor DeSantis signed Senate SB 76 which significantly reformed the litigation environment in Florida by changing the way attorney fees are awarded in disputed insurance cases. At the time, it was stated that it would take potentially two years to feel the impact of that bill, because pending litigation does not fall under the changed law nor do insurance claims for a loss that preceded the bill’s effective date. Many of the insurance companies in Florida are still saddled with the tailing litigation stemming from recent hurricanes, most notably Hurricane Irma. But as a result of the reforms we have implemented thus far, we are seeing some new companies coming into the market.
The Governor has consistently pressed the legislature to enact substantive insurance reform. In addition to pushing for the attorney fee reform in SB 76, in 2019, Governor DeSantis pushed for reform of assignment of benefit (AOB) claims and signed HB 7065 into law. He has also appointed over 100 judges and 5 Supreme Court justices who are having a meaningful impact to reduce frivolous litigation.
Finally, it should be noted that Biden-led inflation is hurting consumers everywhere and causing the prices of consumer goods like homebuilding materials to skyrocket. If it costs more to repair or replace a home, insurance prices will rise. The governor will continue to work to protect Floridians from the poor choices being made in Washington D.C.
We continue to work with the Office of Insurance Regulation to monitor the stability of the market."
Auto insurance is another big concern for residents navigating the price of paradise.
Experian said inflation rates are affecting car insurance across the country. In fact, the worst they’ve seen in 40 years.
“Been a long time since we’ve seen these kinds of cost increases, and it’s affecting everything-- parts for cars, the cost of new cars, the replacement cars, insurance companies are going to have to pick up those costs and they’ll pass them on to you,” explained Rod Griffin with Experian.
Experian created a new online tool to help people compare insurance rates with 40 of the country’s top providers. They say it’s helping people save about $900 dollars a year.
Tips to save on auto insurance:
- Ask your insurance about student discounts for good grades
- If you have a smartphone, some insurance companies offer tracking for good-driving discounts
- Improve your credit score