Homeowners coverage continues to grow more expensive
The Florida homeowners insurance industry is notoriously risky. Many insurers have chosen not to participate in the state market due to the liability they are exposed to, leaving homeowners to rely on state-run Citizens Property Insurance to find the coverage they need. One of the reasons that private companies are unwilling to participate in the Florida market is the frequency with which natural disasters hit the state. These disasters have caused home insurance rates to explode over the past several years, despite the fact that Florida has not been the victim of a significant hurricane in the last eight years.
Lack of hurricanes does not stop insurers from raising rates
Florida has experienced some tropical storms that have caused heavy rainfall throughout the state, but eight years without a major hurricane hitting the state has provided private insurers the ability to save a significant amount of money. The past eight years have been quite lucrative, indeed, but the lack of hurricanes has not stopped insurance companies from raising rates. Citizens Property Insurance, through which the majority of Florida homeowners find their coverage, has been raising rates aggressively in order to overcome financial issues that have little to do with natural disasters.
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Rates expected to rise by 69% beginning in 2014
Florida homeowners are set to see their rates continue to rise for the foreseeable future, especially as private insurers begin to write new policies in the market. Approximately 69% of the rate increase proposals filed with the state during October were approved. The majority of these proposals sought to raise rates by more than 20%, placing more strain on homeowners throughout the state. Some of the largest private insurers offered modest increases, ranging below 10%, but insurance coverage is becoming so expensive that many homeowners are beginning to fear for their ability to pay premiums.
Lawmakers focus on Citizens Property Insurance
Lawmakers have been petitioned to resolve the issue of rapidly rising rates, but legislative action is currently being focused on Citizens Property Insurance. The state-run insurer has been working to depopulate itself of policies, encouraging consumers to receive coverage from private companies. The primary tactic has been to raise rates significantly over the past year, thereby forcing consumers to seek out other options from the private market.