Are you ready for next year’s coverage hikes in your Florida home insurance rates? Here are four reasons why they are going up.
Many professionals in the insurance industry have been warning of increases to Florida home insurance rates for a few years now, and next year, their warnings are likely coming to fruition. So, when it comes to time to renew your insurance, you may experience sticker shock, especially if you aren’t aware of the reasons why the rates are going up.
Florida home insurance is designed to cover several costly aspects of your home, such as structural damage to your home and damage to belongings. There are a number of reasons that are affecting the industry’s bottom lines, resulting in Florida home insurance rates going up– including several insurers predicting 20-30% increases. These increases mean hundreds to thousands of dollars tacked on to homeowners’ current premiums.
As Florida’s number one home and auto insurance agency, we hope to give you a better understanding of these massive hikes and provide you with the best rates, from all the top carriers in Florida, helping you save on your insurance. Below are four reasons why you can expect Florida home insurance rates to go up next year.
#1 More People Are Using Public Adjusters
When you file a home insurance claim, you may choose to hire a public adjuster who works on your behalf to ensure you get all that you’re entitled to per your insurance policy. Similar to an independent adjuster hired by the insurance company, they’ll evaluate the damage and the rebuilding costs.
While the public adjuster is working in your (the policy holder’s) best interest, remember the independent adjuster is working in the insurance company’s best interest and adjusts the claim on their behalf. With so many people turning to public adjusters for their claims, it magnifies the insurance company’s financial burdens, in turn causing a hike in Florida home insurance rates.
#2 Reinsurance Costs Are Going Up
Reinsurance is the insurance company’s insurance coverage (yes, insurance companies also have insurance!) to help them pay claims, and it also makes up a substantial portion of their customers’ premiums. Between having to pay more in claims as people continue to use public adjusters and natural causes increasing the number of claims being submitted, re-insurance rates are increasing, which means the customers’ premiums also increase.
#3 Homes Are Aging
Aging is an inevitable part of life–for your house, too. The older a home gets, the more wear and tear it undergoes. For example, water damage from storms, old pipes or appliances, cracks in your floor, etc. all contribute to a greater chance of damage, and therefore claims. The more claims you’ve submitted to your insurance company which the more likely your home insurance rates are going up.
#4 Costs of Building Materials Are Skyrocketing
The cost of building materials, such as lumber, is increasing. In addition, material shortages are also impacting new home construction and Florida home insurance rates.
“Nonresidential construction input prices rose by 2.3% in June, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released last week. This follows a rise in prices of 0.8% in May. Among 11 subcategories, six experienced monthly increases. The increase in prices was driven primarily by energy, with the largest increase coming from crude petroleum, which rose 71.9%. Unprocessed energy materials rose 16.8%, while the price of natural gas fell 18.4%.” – ConstructionDive
Looking for Competitive Florida Home Insurance Rates?
There are several home insurers to choose from and they all have different policies. Though Florida home insurance rates are increasing next year, there is plenty of competition to keep rates as low as possible for you.
If you are looking to change your insurance policy or get a new home insurance policy, let GreatFlorida Insurance shop around for you to present the best coverage and Florida home insurance rates for your budget and needs. Contact us today to get started.