Homeowners insurance rates are increasing for many in South Florida. At Luxury Living Fort Lauderdale, we have heard reports of renewal increases as high as 30 to 40 percent.
For years, insurers have warned the increases would be coming. They attributed the rate hikes to increased litigation, claims abuses, higher-than estimated costs associated with hurricanes Irma and Michael, and one of the most active hurricane seasons in memory.
Mounting losses compelled global financial companies that sell reinsurance to raise their rates 20 to 30 percent before our current hurricane season. Reinsurance is insurance that insurance companies purchase in order to guarantee they can cover losses after catastrophes. Your insurance company is passing those increases to you.
What You Can Do
- Ask your agent to look for a lower rate. Not all insurance companies rate risks the same. Types of homes and neighborhoods that are refused by some insurers might be welcomed by others that are eager to diversify their portfolios.
- Explore ways to trim insurance costs. You might consider lowering some of your coverages or raising your deductibles. Also, you can check the replacement value of your home to make sure you aren’t paying for more insurance than you need.
- Invest in storm-hardening improvements. Work with your agent to see if items like impact-resistant windows and doors, or a stronger roof will help lower your insurance costs. While the improvements will increase your property value, it may take several years to realize insurance discounts.
- Move north or west. Homes north of Palm Beach County are cheaper, and so is insurance. In Southwest Florida cities like Port Charlotte and Fort Myers, insurance costs are about 25 percent less than they are here.
What you might see in 2021
Rising homeowners insurance rate warnings probably sound familiar to you. We had a brief time of rate stability caused by a 10-year hurricane reprieve from 2006 to 2016. Since then, rates have been on the rise.
Unfortunately, you may also see a sizable rate increase next year as well. Analysts expect the reinsurance rate to spike again in 2021, based on the large number of storms making landfall in the United States this year.
If you are the unlucky recipient of a size-able homeowners insurance rate increase, our best advice is to contact your insurance agent. He or she should be able to discuss your best options with you.