Property owners in Florida will be paying more for their coverage even though there haven’t been hurricanes in years.
Despite the fact that Florida hasn’t been struck by a hurricane since 2005, the homeowners insurance rates are still on their way up as the season for these violent storms gets under way this year.
In 2004 through 2005, the state was struck by eight different hurricanes, the last being Wilma.
Hurricane Wilma slashed its way across the southern edge of the state and lead to billions of dollars in damage covered by homeowners insurance. Even though there hasn’t been a hurricane again in the state since that time, the property coverage market has remained shaky and has experienced annual increases that are becoming more difficult for residents to afford.
Homeowners insurance rates have risen even without the storms to justify the increasing costs.
Since 2009, there have been more than 100 requests for homeowners insurance rate hikes that have been approved every year by the Office of Insurance Regulation in Florida. The department’s annual reports showed that many of them were in the double digits.
These increases include the state backed homeowners insurance company of last resort, Citizens. It is the largest property insurer in the state, currently carrying over 1.3 million policyholders. In 2011, residents of the state paid almost $8 billion in premiums, according to a report released by Florida State University in January.
Beyond rate increases, there have been other financial impacts by homeowners insurance in the state, as Citizens, for instance, has had to tighten its belt and create stricter policies in order to reduce the discounts that are available to its policyholders. Deductibles for issues such as sinkholes have also been raised. This is considerable news as Citizens is meant to be the insurer that covers property owners who are unable to find affordable private policies.
With the start of the hurricane storm season officially beginning on June 1, forecasters have been predicting that this year will be more active than average, with 11 to 20 named Atlantic storms and with 7 to 11 that will develop into hurricane strength. Between 3 and 6 are predicted to be major hurricanes. With this prediction, homeowners insurance rates could become even more volatile.