‘Higher and Higher’: Here’s How Rising Reinsurance Rates Are Affecting Florida Homeowners
ORLANDO, Florida. – Property insurance rates are likely to continue to rise in Florida.
The World Market Analysis Report, published three times a year, confirms that reinsurance rates rose by double digits on 1 July.
Those increases are usually passed on to consumers, industry experts say.
Gallagher Re, a global reinsurance broker that underwrites insurers, is raising rates on mounting losses, analysts said.
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The company releases the report three times a year during key update seasons – January. 1, 1 April and 1 July.
Its latest report shows US property reinsurance costs in Florida are up 40% this month as more insurers leave the state.
Sarah Moore is one of 100,000 people in Florida insured by Farmers Insurance who are now seeking coverage after the company abruptly announced last week that it was leaving the state.
“I was completely shocked. I didn’t know anything ahead of time,” Moore told News 6.
Last Tuesday, Moore received an email not from farmers, but from her insurance agent, informing her that the company had made a decision “not to renew all operations in the state of Florida,” according to the email. “Just like you, we learned this news today.”
“I was very disappointed. I was discouraged. I was disgusted,” Moore said. “I didn’t know what I was going to do, just like everyone else.”
This means more people are looking for insurance in Florida at a time when it can be difficult and expensive.
“First, I need to insure two objects. You can’t live on two lots, Moore said. “I never had a break. Everything goes up and up and up.”
And it will probably grow more.
Gallagher Re released its July report showing reinsurance rates for policies that previously faced disaster claims rose by 30-40% this month.
“Overall, there was sufficient capacity for an extension, albeit at a significant price increase, which has now been increasing for several years,” the report said.
Florida CFO Jimmy Patronis is aware.
“Reinsurance faces the same challenges as conventional insurance,” Patronis said. “I tell people all the time, ‘If your insurance rates on your home haven’t gone up 50% in the last two years, you don’t have a home.’ So it affects every person in the state, but again, not just the state, but the entire nation.”
But it looks like it will hit Florida harder than most.
According to the Insurance Information Institute, the average cost of property insurance in Florida this year is $6,000, up 42% from last year.
The average US premium is $1,700, up 11% from 2022.
Consumers like Moore know this all too well.
“If they’re going to raise it even more, I’m done,” Moore said.
Industry analysts say those affected will likely start to see an increase at the next renewal.
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