(MJP) —
A recent study reveals that insurance costs for individuals who own property in Florida have skyrocketed in recent years.
Florida TaxWatch published a detailed study on the property insurance market in Florida, delving into the root causes that are fueling its unpredictability and the significant 42.5% increase observed since 2019. Among these are the repercussions of hurricanes and legal disputes, which have caused strain on insurance companies and led to some of them exiting the state.
As per the report, the property insurance market in Florida is delicate and depends heavily on state-operated insurers to support homeowners who lack choices. Even though it serves as a backup insurance provider, the Florida Citizens Property Insurance Company covers a minimum of 17% of the property insurance market in the state, making it the priciest option available.
According to the report, the increasing number of people joining Citizens is causing concern because if the funds run out to cover expenses, state regulations mandate imposing assessments that could be transferred to all policyholders, such as those with private, homeowners, renters, auto, and pet insurance.
As per a report released in 2021 by Florida TaxWatch, around 70% of residents in Florida reside in counties along the coast and face the threat of continuous flood-related harm. According to the report, the increasing sea levels are endangering a greater number of properties. This means that approximately 64,000 households, valued at around $26 billion, are in danger of experiencing significant flooding.
According to Florida TaxWatch, it is projected that more than 1 million homes will face a heightened threat by the year 2100. This elevated risk is expected to lead to a rise in property insurance costs. If the insurance market does not become more stable, the elevated rates might compel certain individuals to depart from Florida.
Florida surpasses all other states in terms of insurance expenses, representing 10.8% of total premium expenditures in the United States. As per the report, insurance costs differ across counties, with prices ranging from $1,824 in Sumter County to $8,162 in Monroe County.
Starting in 2019, the Legislative branch has approved a sequence of changes aiming to tackle insurance fraud and alleviate the pressure on insurance companies.
According to the report, the legislative initiatives are starting to demonstrate potential. Nevertheless, it also suggests that legislators should stay alert to prevent the market from spinning out of control and strive to strengthen its ability to recover.
Florida TaxWatch suggests that Florida should reduce its dependence on Citizens by decreasing the number of policies it manages and promoting the entrance of fresh private insurance companies into the region.
