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Retirees strained by higher home insurance rates in Florida: Here's how to cut costs

By Erika Giovanetti
Published  March 28, 2022 4:08pm EDT
Personal Finance
Sponsored by Credible, which is majority owned by our parent, Fox Corporation. Credible is solely responsible for its services.
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Floridians are having "a very difficult time" finding a home insurance policy, according to Mark Friedlander of Triple-I. (iStock)

Retirees have long favored Florida for its lenient income taxes and year-round warm weather. But rising home insurance rates have driven up the cost of living for some Americans who chose to live out their twilight years in the Sunshine State.

Florida's property insurance market is "on the brink of collapse" as major companies are becoming insolvent, according to Mark Friedlander of the Insurance Information Institute (Triple-I). This is causing some insurers to drop policyholders and increase rates — the average cost of homeowners insurance in Florida has risen to $3,600, which is more than double the national average of $1,398.

- Mark Friedlander, Insurance Information Institute spokesperson

Many homeowners in Florida saw renewal increases of 50% or more in 2021. Average home insurance premiums in Florida rose by about 25% last year, Triple-I estimates, compared with just a 4% rate increase nationwide. 

"Based on current rate filings, we project average premium increases across the state will range from 30-40% this year," Friedlander said.

Keep reading to learn more about the challenges facing the Florida homeowners insurance industry. And if you're looking for ways to save money on your property insurance premiums, you can visit Credible to compare quotes across multiple insurers for free.

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Why is the average cost of home insurance in Florida so high?

The current turmoil in Florida's private property insurance industry is due to "consecutive years of major underwriting losses caused by rampant roof replacement fraud schemes and frivolous runaway litigation instigated by unscrupulous contractors and unethical trial lawyers," Friedlander said.

As a result, many Florida-based home insurance companies have had to drop clients, raise premiums and even permanently close. Six Florida home insurers have failed in the past 30 months, according to Friedlander — and in recent weeks, two large property insurance companies have been declared insolvent by the state. One of them was St. Johns Insurance, which was the eighth-largest underwriter in Florida.

While lawmakers in the Florida legislature have urged action to combat rising property insurance rates, they recently failed to pass bipartisan legislation "that would have addressed the roofing schemes and frivolous litigation," Friedlander said.

Due to these volatile conditions, Floridians are "having a very difficult time" finding property insurance coverage, Friedlander said. When they do find coverage, policyholders in the state are paying the highest annual premiums in the country.

One way to save money on home insurance is to compare premiums across multiple insurance companies. You can get free rate quotes by visiting Credible.

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Tips for saving money on home insurance costs

Native Floridians and sun-seeking retirees alike have been squeezed by higher home insurance premiums in recent months. If you've been impacted by rising insurance costs, consider these strategies:

Read about each strategy in the sections below.

Consider the state-run home insurance option

If you're unable to find an affordable home insurance policy in Florida, you may consider Citizens Property Insurance Corp., which is the state-run insurer of last resort. According to Friedlander, it's now the largest home insurer in the state.

The Citizens Board of Governors approved 2021 rate recommendations in January, predicting an average 6.1% rate increase for homeowners insurance premiums.

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Make improvements to weatherize your home

One reason why home insurance costs are so high in Florida is the high risk of extreme natural disasters and wind damage. 

About 1.8 million single-family homes in Florida are at risk of storm surge flooding during a Category 3 hurricane, according to Triple-I. Four major hurricanes ranked Category 3 or higher — Grace, Ida, Larry and Sam — made landfall in 2021. Ida alone caused $36 billion worth of damage, making it the second-costliest hurricane ever recorded behind Katrina.

Weatherizing your home against extreme conditions with hurricane resistant window shutters and storm-grade garage doors or roof shingles can help to reduce your annual premiums. Wind mitigation may be as simple as trimming tree branches around your home to protect against roof damage from fallen limbs.

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Shop around across insurance companies

Finally, it may be possible to save money on home insurance by comparing rates across multiple insurance companies. Each insurer has its own set of criteria for determining rates, which means you may be able to save money by switching to a new company while keeping the same amount of coverage. You may also be able to qualify for a discount by bundling your home and auto insurance.

Most insurers let you see your estimated annual premium for free. You can compare home insurance quotes and learn more about homeowners insurance policies by visiting Credible.

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