Windstorm Premiums Spike Up To 1/3 In Florida, 10s Of Thousands Of Policies Canceled [View all]

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Home insurance is getting a whole lot more expensive, a wallet punch for residents of a state that already has the highest property insurance rates in the nation, not to mention a staggering unemployment problem from a surging pandemic. Major insurance companies are raising windstorm premiums in Florida as much as 33 percent and dropping tens of thousands of customers, signaling an end to the nearly decade-long lull in prices. At the same time, some companies also are canceling thousands of home policies to reduce risks of corporate losses.

The reason for the spike? Reinsurance, the insurance designed to buffer insurers from big losses. It keeps the companies afloat and ensures there’s enough cash around to pay claims if a devastating storm strikes. As a rule of thumb, industry experts say, about half of every premium dollar an insurance company collects goes toward reinsurance.

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Along with price hikes, Reshefsky said he’s seen some insurers drop a big number of South Florida clients in areas considered at high risk of hurricane damage. He estimates he’s finding new coverage for about half his high-end residential clients this year. “They start closing ZIP codes. It’s become cost-prohibitive for them to do business, with the cost of the claims and the reinsurance,” he said. “What we keep getting faced with is there’s fewer and fewer options.”

The scarcity means that the remaining firms that will write the kind of policy that covers an expensive home can charge more for it. The other option is the state-funded insurer, Citizens. Late last year, major insurer Florida Specialty Insurance went belly up, forcing its 90,000 clients to find a new company, Insurance Journal reported. Citizens picked up hundreds of those policies, as well as tens of thousands more as private firms slim down their policy count to meet the rising price of reinsurance.

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https://www.miamiherald.com/news/weather/hurricane/article243766772.html