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500% insurance increase worries residents
Daytona Beach Shores residents are concerned after a massive 500% increase in homeowners insurance.
DAYTONA BEACH SHORES, Fla. - Residents of a Daytona Beach Shores Condominium are concerned about a massive hike in property insurance rates.
Jim Smith, the President of the Board of Directors at Marbella Condominiums said the problem started at the end of 2022. According to Smith, the property-wide price they were accustomed to paying was about $40,000. For the past year, the number skyrocketed to over $260,000. It’s an increase of over 500%.
Smith said the circumstances have frustrated residents throughout the building. He tells FOX 35 News he’s reached out to several insurance providers seeking a lower rate, with no luck.
"We know the price we pay for living on the beach. But it shouldn't be that the insurance is the big driver of what it costs you to live here," Smith said. The building was constructed in 2007, and according to Smith, they haven’t filed any property claims since then.
During Hurricanes Ian and Nicole, the property's pool, patio, and walkway sustained damage. The people who live there are paying for the repairs, jointly. The building went unscathed, providing no reason for an insurance claim to be filed.
For Smith, the lack of use of the coverage strengthens the frustrations. "They're never going to have to pay a claim here because our deductible is so high too. Our deductible is a million dollars."
Smith is in talks with insurance companies, and while it’s not set in stone, he’s anticipating an additional 30% increase.
Patty Blais lives at Marbella, and for her the rate hikes are challenging her ability to stay. On her bill, the property insurance accounts for over $1100, which is roughly a third of her living expenses. "It's just not fair," she said. "I've got enough reserves to maybe ride out another season of this insurance. But otherwise, I may have to sell the place…"
Insurance expert Karl Susman said the high rates are due to an absence of competition within the insurance market, combined with the fact insurance is required by law.
This creates an environment where companies are able to charge what they wish, as the property owners don’t have much choice. With that said, he expects the market to correct at some point. The alarming rise in rates is present not only at Marbella, but also at condos all over.
"A 500% rate increase is completely out of sorts, and it's completely unsustainable," he said. "We're in for a rough ride for probably another year, maybe two years, worst case. But the industry, as it always does, will adapt."