The season for these major storms has now come to a close but rates still aren’t dropping.
The official close to the hurricane season was on Monday, but even though there hasn’t been one that has struck Florida in ten years, homeowners insurance rates remain high and many are wondering why they aren’t falling due to the improvements in natural disaster damage.
Insurance companies have stated that the reason doesn’t have to do with storm frequency as much as building cost.
The price of building materials has been rising very quickly, including for items such as shingles, windows and siding – all materials that must commonly be replaced as a result of storm damage. This helps to explain why the premiums for homeowners insurance aren’t being reduced even though the storms, themselves, haven’t been happening in the state for over a decade. That said, many consumer advocates are saying that this explanation from insurers is merely an excuse and that it’s time to look to elect people who will fight for consumers to help to improve the accuracy and fairness of the situation.
Florida homeowners insurance companies have been accused of overpricing their coverage.
For instance, Sean Shaw, a consumer advocate, has said that regardless of the cost of building materials, because the hurricanes simply have not been happening, then it means that the insurance companies aren’t having to pay out to rebuild homes. Therefore, all the money that consumers are paying for that coverage is simply boosting the amount that CEOs are taking home and is not actually covering the costs of providing the coverage.
Back in 2004 and 2005, Florida saw billions of dollars worth of damages to homes throughout the state. There weren’t many people who were shocked when the premiums for coverage skyrocketed after those years. However, it is now ten years later and the storms from that time have not returned. Homeowners are growing frustrated and impatient – to say the least – with the fact that the rates are not reflecting the new weather trend.
At the moment, many of the residents of Florida are paying some of the highest homeowners insurance rates in the entire country. That said, insurance companies have also underscored the fact that hurricanes aren’t the only peril covered by those policies. They have also cited sink holes, PIP, fraud, and other high expenses. Still, they are also continuing to report record-breaking profits.