In Florida, the property insurance crisis is leaving homeowners with little options and major rate increases.
For years, insurance companies operating in Florida have claimed that increased fraudulent claims, combined with other factors, caused millions of dollars’ worth of losses. Insurance companies increased their rates and premiums or limited their policy coverage. Now, insurance companies are simply pulling out of the Florida market.
Effective January 1, 2022, United Property and Casualty Insurance Co. announced that it would cease writing new homeowners’ insurance policies in Florida. The insurance company is one of the largest homeowners’ insurers in the state. It cites the unprecedented 2020 storm season, significant increases in reinsurance cost, and worsening litigation trends as reasons behind its decision.
This isn’t the first insurance company to suspend or decrease new business in Florida. In November 2021, Florida Farm Bureau officially halted administration of new policies. Similarly, Progressive Insurance announced that it would not renew HO-3 and DP-3 policies for homes with shingle roofs aged 16 years or older. Other homeowners’ insurers are requesting major rate increases.
In 2002, the Florida Legislature enacted Section 627.351(6), Florida Statutes, which created the Citizens Property Insurance Corporation. This not-for-profit property insurer of last resort was created for homeowners who did not qualify for and could not obtain insurance coverage elsewhere. Today, Citizens Property Insurance Corporation is the largest property insurer in the state as private insurers steadily restrict their policies.
While Florida lawmakers took up discussion of the collapsing insurance market during the 2022 Legislative Session, the legislature failed to pass any resolution.
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