Rate Increases Loom Large for South Florida Homeowners
May 31, 2016
How Will Rate Increases Affect Water Damage Claims in The Tri-County Area?
In response to the rising costs of water damage claims to insurers, state regulators approved rate increases on homeowners insurance. According to state records, one leading insurer, Federated National Insurance, was granted a statewide increase of 5.5 percent which affected over 54,000 policies. In addition, Tower Hill was granted a 13.1 percent and an 8.2 percent rate hike for their Select and Preferred lines, respectively.
Meanwhile the state Office of Insurance Regulation is poised to grant rate hikes to a number of other insurers, particularly with respect to so-called multi-risk policies that bundle hurricane and other risks. For example, Universal Property and Casualty is said to be seeking a 2.6 percent increase on its personal lines policies overall, and an average 5 percent hike for its multi-risk plans. The company reportedly insures over 190,000 residences making it the second largest insurance carrier in the state.
Of course, state-run Citizens United Property Insurance Corp. is the largest insurer in the state, with over 236,000 homeowners under its umbrella. This non-profit, tax exempt entity was created over a decade ago to cover Floridians who could not get insurance when private insurers retreated from the market after a series of devastating hurricane seasons. Citizen’s policies are generally more restrictive and offer few options than policies offered by private carriers.
In 2016, Citizens raised its rates by an average of 3.2 percent, but South Florida homeowners saw rate hikes ranging from 4.8 percent to over 6.2. The company claims that these rate hikes will partially offset the spike in water damage claims and assignment of benefits abuses. Citizen’s believes these factors will only lead to larger increases in the coming years if left unchecked.
While the rate increases are being seen throughout the state, South Florida will bear the brunt of the rate hikes since water damage from flooding is a greater risk in these counties. Even worse, some carriers are reportedly not writing new policies in Miami-Dade and Broward Counties which means consumers have few choices and will be forced to pay higher rates.
Many of these carriers argue that these rate increases are being prompted by claims that have been jacked up by water restoration companies and public adjusters. These players convince policy holders to assign their benefits and then submit padded claims for work that was beyond the scope of the damage. While rate increases may be inevitable, homeowners who need help with any matter related to insurance claims should engage the services of an attorney with knowledge of property and casualty insurance.