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Why Did My Homeowners Insurance Premium Increase?

Why Did My Homeowners Insurance Premium Increase?

Photo by Helloquence on Unsplash

Are you one of the many Florida homeowners who have recently received a non-renewal notice or a rate increase from your home insurance provider? There is a common sentiment among Florida property owners who are having a hard time keeping home insurance costs to a minimal: Curbing the rising insurance cost before it hits their mailbox.

The carrier justification for these price increases is deeper than you may anticipate. It’s true that Hurricane Irma and Hurricane Michael caused insurers to process $15 Billion in claims according to Florida’s Office of Insurance Regulation. Although Florida is one of the most hurricane prone states in the country, data projections usually account for such storms and claim payments are generally well within the parameters of the reserve funds of these insurance carriers. The real culprits of compounding insurance premiums are related to Water Damage, Fraud, and Litigation.

Water Damage claims are on the rise in Florida and this is not related to flooding. The water damage related to a bursting pipe is covered by most special form homeowners policies. These types of claims have increased in frequency and have been related to mold claims that result from a covered loss. Mold remediation is usually completed by a restoration specialty contractor and the costs for services and repairs can be costly. Most restoration contractors that handle repairs are extremely reputable and ethical, however much like any other aspect of life, there are a few bad seeds that have shed a negative light on the industry through the eyes of the insurance carrier.

Fraud is a common concern of insurance carriers as they have seen Assignment of Benefits (AOB) claims skyrocket through what they deem as “unnecessary labor”. The AOB formally allows the contractor to act on behalf of the insured in collecting the claims so that they can work with the insurance adjuster to get the claim settled without requiring action from the homeowner. This sounds great in theory, but there have been some contractors who have substantially increased their invoices in order to drive the cost of the claim up. Thus, benefiting from the payout. When insurance carriers push back against the inflated invoicing, litigation ensues.

Litigation in the insurance industry has garnered a lot of attention recently with insurance carriers urging Florida legislators to institute reform. Florida’s Senate Committee on Banking and Insurance held a meeting earlier this month and insurance representatives were very outspoken about the need to check the legal fees that pile up when litigating claims. The complaint from insurance companies is that there are instances when they are forced to settle on a fraudulent claim amount because litigating would be more costly in the end. Insurers have routinely paid out legal fees that exceed the total claim amount for the homeowner. By placing restrictions on the amount an attorney can bill or who is responsible for the attorney fees, insurance carriers are anticipating their deficit to be reduced. This is good news for many Florida homeowners as it may offer relief from the rising premiums.

The battle over litigation is one that is handled by legislators, however there are still actions that individual homeowners can take to offset increases and even reduce premiums. Roof age is a huge concern for insurance carriers, so the newer the roof on your home the lower your insurance costs are going to be comparatively. It’s understandable that residents are not exactly beaming with excitement at the thought of running out to purchase a new roof. However, adding wind mitigation features such as updated roof-wall attachments and opening protection can also make a big impact on homeowners insurance premiums. Most importantly, utilizing an independent insurance agent who can quote your homeowners insurance through a wide variety of insurance carriers offers you the best opportunity to obtain a great rate while receiving sound advice. Contact a Moore Resources Insurance Agent for more information or for questions regarding your homeowners insurance options.





Moore Resources is an Independent Insurance Agency located in St. Petersburg, FL and offering Homeowners Insurance, Auto Insurance, Personal Insurance and Business Insurance. Our reach extends beyond the Tampa Bay area to the entire state of Florida. Moore Resources has regionally been dedicated to serving the local residents of Pinellas, Hillsborough, Polk, Pasco, Manatee and Sarasota counties; including St. Pete, Tampa, Clearwater, Bradenton, Brandon, Dunedin, Gulfport, Lakeland, Largo, Lutz, Palm Harbor, Pinellas Park, Riverview, Ruskin, Seffner, Seminole, Temple Terrace, Tierra Verde, Town n Country,  and the Gulf Coast Beaches.


The purpose of this blog is to present general information only. It does not interpret specific policies or coverage. In order to obtain detailed information regarding your insurance, contact a licensed insurance agent.