Floridians becoming insurance poor

If your home insurance bill was a shock — or you find yourself struggling to find insurance — you're not alone.

As a matter of fact, rising insurance fees and even cancelations are becoming common in Florida as the state grapples with companies tired of dealing with our tumultuous weather.

And no one is being spared.

Just ask state Rep. Michael Grant, R-Port Charlotte. We called to ask him about the state of insurance and what more the Legislature might be able to do.

"Funny you should ask. I just got a letter in the mail that my insurance was canceled," Grant said. "I've got to get busy and see what's available."

Thousands of Floridians are throwing up their hands in despair at huge increases in insurance costs, and others are desperate to find an insurer after several companies left the state and others declared themselves insolvent after the multi-billion-dollar hurricane losses in 2022.

The most recent insurer to abandon the Sunshine State was Farmers, which left more than 100,000 homeowners in limbo.

Since 2016, about 13 insurance providers have declared insolvency in the state and nearly a dozen or more have pulled up stakes and left.

The situation has left homeowners in the state paying an average of more than $4,200 for an annual premium, Mark Friedlander, spokesperson for the Insurance Information Institute told USA Today. That is about twice the average cost nationwide.

The Florida Department of Financial Services website lists 14 companies that are currently in liquidation in the receivership process.

"It's as bad as I've ever seen it," said Jim Nolan, head of Nolan Family Insurance in Punta Gorda. "There are just no options out there right now. And with the limited number of companies doing business in the state, the ones here are very particular who they insure. If you have an older home, there are just not many options."

Nolan said Citizens, the state-run company of last resort, is the only option for many people, but its list of customers has swollen way beyond what Florida lawmakers would like.

The fear is the company will get so big that a terrible hurricane season would wipe out the reserves held to pay for damages.

Citizens had 1,363,606 policies as of Aug. 11, according to information posted on its website. Its growth has been rapid as its client list rose from half that, 661,150 policies just two years ago on July 31, 2021.

To slow its growth, Florida tried to raise its rates about 12% for the average policy and up to 50% on homes that are not permanent residences.

But just last week the state Office of Insurance Regulation called on Citizens to "calculate new, reduced, overall average statewide rate increases for the rate filings."

A spokesperson for Citizens said they are reviewing that order.

"We are reviewing the final order and will submit a revised set of recommendations, as requested, based upon OIR's findings and directives," Michael Peltier said in an email.

All the problems with normal homeowners insurance does not even address the shock waves for customers who find they now need flood insurance under new FEMA-drawn maps released last year.

Flood insurance is separate from most homeowners policies and can add $4,000 or more to the annual price of policies.

FEMA is being sued now by Gulf states that believe the maps cover flooding that could occur with rising seas but are not based on actual flooding that has occurred.

Kim Guenther, who has a three-bedroom home in Northwest Port Charlotte, is one homeowner caught in the crosshairs.

"The new FEMA map said I need flood insurance — which I never had — and it's going to be over $5,000," Guenther said. "And, my homeowners insurance went up to almost $5,000, and all that along with property taxes is too much. I can't afford it. I'm putting my house on the market."

The task of how to lower policy costs in Florida is drawing plenty of heated debate.

Grant, majority leader in the Florida House of Delegates, says patience is needed to allow laws the Legislature passed in 2022 to impact the market.

"Interest rates are up and people in the re-insurance market (which is insurance insurers buy to cover their losses) can make more money in money markets than reinsuring Florida," he said.

Reinsurance rates, Nolan agreed, have gone up to the point insurance companies have to raise their rates to afford it.

"This happened after Hurricane Charley," Grant recalled about the aftermath of the Category 4 hurricane that struck Charlotte and DeSoto counties in 2004.

"My insurance company went bankrupt. There were like four or five hurricanes that year and a lot of companies went bankrupt. But to make people who had policies with them whole, every product the next year got assessed higher to replenish the insurance pool," Grant said.

Grant and Nolan both said the future of insurance costs in Florida will depend on what kind of hurricane season we have this year.

"I think insurance will be discussed when (the Legislature) meets in 2024," Grant said. "If we go unscathed and insurance companies are making money, more companies will come back. But, if we get hit (hard) it will change what we do in Tallahassee."

There is some good news out there.

The Florida Office of Insurance Regulation recently approved Orion180 Select Insurance Company and Orion180 Insurance Company to form as property and casualty insurers in Florida.

They are the third and fourth property and casualty insurers approved to operate in Florida following the Legislature's reforms passed in 2022.

"(This) is another sign that the reforms are having a positive impact on Florida's insurance market," Commissioner Michael Yaworsky said. "We look forward to continuing this momentum and giving consumers more options in the market for homeowners insurance."

Orion180 Select Insurance Company and Orion180 Insurance Company are Indiana-based property and casualty insurers and applied to operate in Florida using an expansion application.

An expansion application is for use by companies in good standing in their state of domicile that wish to expand their business into a uniform state.

If that trend continues — and we avoid the Category 2-5 hurricanes this year — we could see some easing of premiums.

However, if another Ian happens, no one can predict what happens next.