Every state in the union has its own unique challenges that can jack up the cost of homeowners insurance. But some are more challenged than others, and Florida may be the champion. If you live in the Sunshine State, you already know that in recent years, your chances of finding cheap homeowners insurance in Florida were just slightly better than the odds of discovering the Fountain of Youth. But take heart, things are getting better and more competitive. Armed with the most current info and the will to succeed, you can find reasonably affordable homeowners insurance in Florida. You can shop for competitive homeowners coverage in Florida here.
Florida’s Hurricane Drought & Improving Insurance Marketplace
Once a giant, insolvent mess not too long ago, conditions in Florida’s homeowners insurance market have improved of late, largely because no hurricane has made landfall in Florida since 2005. According to the National Hurricane Center, this is the longest stretch of consecutive hurricane-free years since 1851. That’s a large reason why Kevin McCarty, Florida’s Insurance Commissioner, reports that the homeowners insurance market in Florida is the strongest in 10 years.
“Florida companies, which make up a majority of this market, have built $4.5 billion in surplus, $16 billion in reinsurance capacity, and renewed profitability that has created new competition in the market. As a result, Florida consumers now have more options and choices for homeowners coverage,” McCarthy wrote late in July 2014.
In fact, Florida may have taken a bad rap, McCarty claims. He points out that while 12 homeowners insurance companies failed in Florida over the past 10 years, today there are 119 companies with homeowner’s policies in the state. It is actually sinkhole claims that have cost the state’s insurers billions in recent years, a claims crisis that the Florida Legislature has successfully addressed. Having endured and survived one of the worst economies since the Great Depression, Florida’s homeowners insurance industry has returned to profitability, McCarty says.
McCarty also points out that since 2011, the state has beefed up rules and procedures, and now requires private insurers to have a minimum of $15 million in surplus, an increase from the previous requirement of just $5 million. The Legislature also enabled new tools to aid in the supervision of insurance holding companies, along with new solvency standards. Acknowledging that failure is still an option for Florida’s insurers, McCarty is nonetheless optimistic about the ability of the Florida Office of Insurance Regulation to govern the industry and ensure that insurers offer products at fair, adequate and non-discriminatory rates.
Citizens Depopulation Program
One of the things McCarty and his agency are doing is a critical analysis of companies participating in the Citizens Depopulation Program. What’s that? Well, in 2002 the Florida Legislature merged the Florida Windstorm Underwriting Association and the Florida Residential Property and Casualty Joint Underwriting Association to form Citizens Property Insurance Corporation (Citizens for short). This was done because many Floridians were experiencing astronomical premium increases or simply being dropped by their insurers. Under its charter, Citizens functions as a government-run insurer of last resort, writing coverage for consumers who can’t find it or afford it elsewhere. At one point, Citizens had about 1.4 million policies in force -- or nearly one in every four Florida homes! The fear was that if Citizens were to become insolvent, Floridians would be on the hook for any losses resulting from hurricanes or destructive storms. Citizens was also required to charge premiums high enough to cover a 1-in-100-year hurricane without resorting to bonds or assessments to make up the loss. At the same time, the Legislature was encouraging new insurers to enter the market and allowing them to cherry-pick individual policies from Citizens and send the policyholders offers to insure. Initially, premiums from these companies were comparable to those offered by Citizens, but the renewal rates often increased 30% or more. Making matters worse, many of these newcomers were underfunded and ultimately declared insolvent by the insurance commissioner. Floridians were left with a Hobson’s choice of Citizens or no insurance at all.
Faced with an untenable situation, in 2012 the Florida Legislature authorized Citizens to develop programs to help return Citizen policies to the private market by allowing private insurers to assume policies. The Florida Office of Insurance Regulation determines which companies can participate in the program, subject to stringent review.
According to Citizen’s website, agreeing to the assumption of your homeowner’s policy by one of these private insurers is voluntary, but you must opt out within the allowed timeframe after receiving notice. If you don’t, you’ll receive a Notice of Assumption and Non-Renewal and a Certificate of Assumption. You will then have additional time after receiving this notice to elect to stay with Citizens.
Homeowners Rates are Dropping
As of May 2014, Jeff Harrington, a Tampa Bay Times staff writer reported that, “half a dozen of the state’s 30 major property insurers have a recently approved or pending request for a rate cut between 2.5 percent and 9.2 percent.” Harrington also noted that American Bankers Insurance Co. had already been approved for a 15.4 percent rate cut.
Policyholders sticking with Citizens will get a rate break, too. In a June 23 article, Harrington wrote, “Citizens plans to cut rates in 2015 for nearly seven out of 10 policyholders statewide with the rates falling by an average of 3.2 percent.” In addition to the eight hurricane-free seasons to date, Harrington credited a lower payout for sinkhole claims and lower costs for reinsurance.”
 “Florida Hurricanes: No landfalls in 8 years,” http://www.weather.com/news/weather-hurricanes/florida-hurricane-drought-20131016
 “Florida Home Insurance Market is Strong,” Kevin McCarty, http://www.heraldtribune.com/article/20140723/COLUMNIST/307239996/-1/rss?p=1&tc=pg
 “Depopulation,” https://www.citizensfla.com/about/depopinfo.cfm
 Jeff Harrington, “Florida see small break in deluge of rising property insurance rates,” http://www.tampabay.com/news/business/banking/florida-sees-small-break-in-deluge-of-rising-property-insurance-rates/2179465
 Jeff Harrington, “Most Citizens Property Customers in Tampa Bay Will See Lower Rates,” http://www.tampabay.com/news/business/banking/most-citizens-property-customers-in-tampa-bay-will-see-lower-rates/2185585