Do you feel like your homeowner insurance premium is always on the rise? To help you better understand why, here are some of the reasons:
Even though, we did not have any major hurricanes in 2019, Florida home insurance rates continue to reflect the damage from Irma which hit the state in September 2017 and caused $11.1 billion worth of damage. Hurricane Michael also hit Florida in October 2018, causing $6.4 billion worth of damage to the state.
Another important factor playing into high home insurance rates is the number of lawsuits by contractors that convince homeowners to sign over benefits of their insurance claims, and in turn those contractors inflate repair invoices and sue their insurers. The lawsuits added millions of dollars to insurers’ cost of doing business, which caused the insurers to pass this expense back on to you (the consumer).
Furthermore, high home insurance rates are due to the reinsurers — the companies that sell insurance to insurance companies to guarantee they can pay off claims in case of a catastrophic event. Reinsurers and industry analysts explain that Inaccurate Loss Adjustment Expenses assumptions, understated litigation costs, unpredictable trends in Assignment of Benefits and erroneous modeling data are some of the reasons why the reinsurance industry fell short.
Lastly, Florida residents are seeing steep increases because more often than not, insurance companies use insurance scoring as a rating factor. An insurance score is just another version of a credit score but instead of measuring credit worthiness, it predicts the risk of how likely the applicant is to file a claim. It is calculated from a combination of your claim history and credit score.
At Park & Associates we do our best to stay ahead of the curve and know about potential rate increases long before your policy expiration. This allows for a thorough policy review and quoting of other markets. Talk to one of our consultants and let us educate you about insurance and discover more ways to offset insurance company’s rate hikes.