A recent report pointed to skyrocketing premiums as a deterrent to purchasing homes in Florida.
Rising home insurance rates are nothing new to property owners in Florida, but recent hikes have been particularly high, and with an additional 1% emergency assessment fee to be applied to policies, real estate agents are seeing increased hesitation from customers.
The state has been attempting to come up with a strategy to overcome a coverage crisis.
The emergency assessment fee was announced earlier this month and is intended to help deal with the issues in the state that have sent several carriers out of the state while others are now in receivership. This new order, which will go into effect in October, will collect 1 percent from policyholders. That money will be added to the Florida Insurance Guarantee Association (FIGA), the non-profit agency handling homeowners’ claims when their private insurer is insolvent.
According to realtors in a recent News4Jax report, the rate hikes and additional emergency assessment fee have brought many customers to the point that they are hesitating to purchase properties. They have been watching a slowdown in the number of properties purchased due to this hesitation.
Home insurance premiums are making some consumers nervous about the cost of ownership.
Consumers are unsure about the expenses they will face if they purchase a property they are considering. The recent rising inflation has already made essentially everything else more expensive, and watching home insurance premiums continuing to rise has associated a greater sense of risk with purchasing a property, said the report.
As the state continues to face more frequent and intense storms, leading to record-breaking damage losses, the price of home insurance coverage is only expected to climb. Even homeowners in areas that haven’t been directly affected by the hurricanes and tropical storms, prices have been increasing for their property coverage.
“The emergency assessment is necessary to secure funds for the payment of covered claims, to pay the reasonable costs to administer such claims, including claims resulting from insurance companies that have become insolvent or may become insolvent as a result of losses incurred due to hurricane,” explained FIGA executive director Corey Neal.