Some experts are saying that premiums could experience another massive spike this year.
Homeowners in Florida are already paying some of the highest property insurance rates in the United States, but experts are cautioning that even these high levels are likely to see significant increases this year.
Some homeowners are already paying three times the national average for their coverage.
The Florida Legislature recently passed a number of measures in the hopes of making a long-term impact that will gradually reduce property insurance rates. That said, while those advantages have yet to be seen, the short-term continues to head in a steep upward direction.
Estimates released by the Insurance Information Institute (III) show that premiums paid by homeowners in the state are likely to rise by another 40 percent in 2023. What has yet to be seen is how Floridians will be able to afford these higher rates, and how this will alter the affordability of homeownership in the state.
Spiking property insurance is making it much harder for Floridians to afford to own their own homes.
On top of the rising cost of the homes themselves, many people are struggling to find the money they would need to pay for their coverage as well. This is causing many people to have to make some difficult choices about where they will be living. Though it is possible to save money on premiums by making coverage changes, such as raising deductibles, that means that if the home is actually damaged, the out-of-pocket costs become substantially higher and equally unaffordable to that homeowner.
According to a recent WEAR report, the hikes in premiums are making homeownership unsustainable for many people in the state. Mortgage companies require a certain level of coverage, but many homeowners cannot afford it. When that coverage is lost, force-placed policies are implemented instead, often at an even higher cost, one that homeowners are required to pay, or they could lose their homes altogether.
As Citizens, the state-backed property insurance company of last resort continues to swell in numbers – having doubled since last year, and as more insurers leave the state, it is unclear how Florida’s short-term strategy will keep the state out of a full coverage crisis.