Homeowners insurance premiums on the rise

Florida Homeowners Insurance

Insurance rates are increasing all across America.

Homeowner’s policies, automotive and healthcare have all seen sizeable increases over the last few years. It’s looking like 2011 will be no different; several states will be seeing moderate to substantial increases to their homeowner’s policies.

Homeowner’s across the United States have been seeing an increase in premiums for several years. The first major increase was due to the 2004 and 2005 hurricane season; the damage in those two years (especially from hurricane Katrina), caused massive claims and payouts.

Many agree that as a business, insurance is the most regulated industry.

Regulators have the task of ensuring companies do not raise rates excessively, compared to the risk involved. Out of the many states that are seeing large increases in premiums, one that is especially controversial is Florida.

Homeowner’s in Florida may see a 15 percent increase all across the state; alternatively, some individual homeowner’s could see up to 30 percent of an increase in rates. There have been several “theories” as to why the huge increases have occurred. Some blame it on regulators for restraining insurance companies from raising rates (over several years), even when they felt it was necessary and justified.

Others say it involves the law requiring insurers to pay full settlements up front for property damage.  Some contend that by paying the entire settlement upfront, before any work is done to repair the property damage; many people are taking the money, and not repairing the home.

This lowers the property value and leaves the real estate market flooded with damaged homes.

It also increases fraudulent claims. Lawmaker’s have advanced Senate Bill 408, a major part of the industry overhaul. The bill goes directly after the causes of increasing rates. Those causes are seen (in part) as sinkhole claims, restriction on insurance from raising rates without approval, long claim windows and fraud.

Several local Lawmaker’s claim this bill is “anti-consumer” and obviously written by the insurance companies. Senate Bill 408 is one of several bills created to overhaul the insurance industry and stop rapidly rising rates.

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