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Market Conditions Impacting Home Insurance Rates

August, 2023

From a carton of eggs, tank of gas, and even streaming subscriptions, it seems like the price of everything is rising – and in Florida, the costs of home insurance seem to be leading the pack!

Skyrocketing insurance premiums are caused by so much more than inflation. Here’s a closer look at the market conditions propelling the increase in Florida home insurance premiums.




Florida's Man-Made Litigation Crisis

Unscrupulous contractors and lawyers have run rampant in Florida,

taking advantage of homeowners with padded claim estimates leading to costly litigation for insurance carriers. Although the recent reforms enacted by the Florida Legislature should curtail some of the litigation abuse, there is still more work to be done.

Increased Reinsurance Costs

Reinsurance is insurance for insurance companies. It’s extremely important that carriers have reinsurance so that they can remain solvent and guarantee payouts for their customers for catastrophic events.

However, reinsurance costs continue to rise due to:

  • Increase in frequency and severity of weather events in Florida and internationally

    • $50 -$65 Billion: Hurricane Ian was the world’s costliest natural catastrophe for insurance companies

    • $115 Billion: Estimated cost to insurers worldwide for hurricane and other natural catastrophes in 2022

    • Roof claim and litigation abuse – insurance companies in Florida have had to cede losses for smaller convective storms due to contractors and trial attorneys who have used loopholes in the law to create a cottage “free roof” industry.

  • Reinsurance carriers limiting their capacity (in part due to the abusive practices listed above), driving up demand


Increased Replacement Costs

The amount of coverage included in your insurance premium is largely determined by Coverage A. Coverage A is the cost to completely replace the structure of your home, including the cost of materials and the cost of labor.








Customize Your Policy to Save on Your Premium

Here are a few ways you can potentially reduce your premium:


Higher Deductibles = Lower Premiums

Agreeing to pay higher deductibles in the event of a claim can decrease your premium. If you are adding coverage to your policy, you could also offset the increased costs by increasing your deductible.

Explore Your Contents Coverage Options

Contents Coverage (also known as Coverage C) is calculated as a percentage of Coverage A, which is the cost to replace the structure of your home. Think about how much it would take to replace your personal belongings to determine the Coverage C amount you actually need. By lowering your contents coverage, you could save big on your premium.

Ask About Discount Options

Your insurance company may have ways to help you save.

What Else Can You Do?

Talk to Your Agent to Ensure You Have Appropriate Coverage

  • Insurance coverage can be customized to fit your needs and you may need to upgrade to an enhanced policy to ensure you have the right coverage.

  • Coverage for additives such as wind-driven rain and pool enclosures are not automatically included on your policy. Double check with your agent that everything you need is covered – or be prepared to pay out of pocket.

Support Legislative Reform

  • Follow (and on social media) to learn more about the insurance crisis in Florida.

  • Contact your legislators and make your voice heard against rising insurance premiums.

Review Your Policy Carefully

  • Insurance is not a commodity – a base policy often gets you just the basics. Ask about your screen enclosures, fences, carports, gazebos, and more to make sure you have the coverage you need in the event of a loss.

  • Insurance does not cover maintenance or wear and tear – talk to your agent about the perils covered by the policy.

  • Florida home insurance policies allow for a separate hurricane deductible, which is often 2% of your Coverage A amount.

  • Flood damage is not covered by home insurance policies. Please talk to your agent about this important coverage.

Did You Know?

In 2021, Florida accounted for 80% of all homeowners insurance-related lawsuits nationally, but only accounted for 9% of homeowners insurance claims.

(Florida Office of Insurance Regulation)

Reinsurance costs have risen 100% in the past 4 years! In 2023, reinsurance costs 30-100% higher than in 2022.

(Gallagher Re)

Year-over-three-year inflation saw homeowner replacement costs increasing a cumulative 55% across the U.S.

Insurance Information Institute

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