High costs force some homeowners to choose: Drop insurance, sell or leave Florida [Miami Herald]
As
That is the conclusion of
"I can absolutely say that the rising cost of homeowners insurance is really having significant impacts on homeowners and causing them to make drastic decisions on whether or not they stay in the state or whether they move,'' Carter told the Herald/
"It not only impacts the seniors who are living on a fixed income, but it also impacts just working-class families and families that are at every economic level,'' she said.
Rep.
"When your insurance goes up
As
"We have seen a slight uptick in
Legislators this week are meeting in special session to fast-track approval of a series of proposals hammered out by Republican leaders and the staff of Gov.
"I don't know that we will see a decrease in premiums in the short term, but you will see a stabilization of the market,'' said Rep.
He said the package of proposals -- to reduce the financial incentives for attorneys to file lawsuits against insurers, give homeowners less time to file a claim and create a
Fears of foreclosures
Hart and other members of her caucus warn that as legislators attempt to preserve the market without preventing higher costs for many homeowners, the result will be a surge in mortgage foreclosures.
"I think about the thousands of people that we put through the first-time home buyers programs over the last 10 or 15 years that are in those homes now,'' said Sen.
"Now, all of those contracts, and thousands of people, are in jeopardy of losing their homes,'' she said. "Many single moms, single dads, who we sold the American dream of home ownership, now find themselves foreclosed on, or having to sleep in their cars because they don't have the extra insurance money."
Even bankers and mortgage insurers who finance people's homes are worried that the reforms may not do enough to prevent turmoil for many homeowners.
"Bankers by rule are cautious, and they're a little bit concerned about people's ability to pay insurance, what's happening with inflation and other economic headwinds," said
He warned that when homeowners receive their new escrow statements next year, many will face sticker shock. Escrow accounts help homeowners set money aside each month to cover insurance premiums and property taxes. When the costs rise, the mortgage lender requires homeowners to set aside more money to cover their monthly payments.
"Homeowners may not be able to pay or they may just say the heck with it, and we're not going to pay our mortgage,'' he said.
If homeowners drop their windstorm insurance coverage and continue to carry a mortgage, the lender can purchase coverage to protect its interests and charge the homeowner for it. The process, known as lender-placed or force-placed insurance usually carries a higher premium cost.
Impact on
The changes being pushed by
But some legislators warn that this policy could force more homeowners, who went into Citizens because they either couldn't find or couldn't afford the insurance available on the private market, into economic distress.
"How is it that certain people that can't afford the private market can get around the 20% rule?'' asked Sen.
"What about the ones that are going to be faced with an inevitable sale of their home when they don't want to because they can't afford it?"
Sen.
He said that if people choose to voluntarily drop their insurance coverage because they have no mortgage, that's their choice, but "I'm not willing to force something on them."
"I would advocate people need to protect what in most cases is their most valuable possession or their biggest asset,'' he said. "Some choose not to. Some can't get it" but consumers should "make their own minds up as to what they want to do."
Carter, the insurance consumer advocate, said she advises people to consider their options before dropping their insurance. Among them:
Work with an insurance agent to shop around and try to find multiple insurance quotes.
Consider taking a policy with a higher deductible but a lower premium and take advantage of all policy discounts, such as is often offered when you bundle an auto insurance policy with a property insurance policy.
Invest in ways to fortify the home through hurricane-proof windows and doors, strengthening roof or wall connections or reinforcing your garage door.
"All of those additional features will not only help to strengthen your home but they'll also reduce ... subsequent insurance claims,'' Carter said. "And then the homeowner will also be eligible to receive wind mitigation premiums as well as a lower repair premium."
Neither the state office that regulates banks, the
Osgood, the
"Sometimes with public policy just basic human decency -- that might not fit the math equation for profit -- has to be a concern of those that are elected by the people, for the people,'' she said.
(C)2022 Miami Herald. Visit miamiherald.com. Distributed by Tribune Content Agency, LLC.
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