Some Tallahassee residents are seeing their homeowners insurance climb in real time. As more hurricanes make landfall near Florida’s capital, prices are surging for homeowners.
Property insurance covers damage or loss by theft, which can include fire and storm damage. The standard homeowners’ insurance is divided into several parts: Coverage A: structure, Coverage B: other structures, Coverage C: personal property, Coverage D: loss of use, Coverage L: personal liability and Coverage M: medical payments to others.
Samantha Bequer, communications director for the Office of Insurance Regulation, says the Florida property insurance market has faced difficulties recently.
“Excessive and expensive litigation significantly exacerbates the majority of the major cost factors in the Florida property insurance market, such as catastrophic claims, unfavorable loss reserve development, and increased reinsurance costs,” Bequer said. “Insurance companies raise rates to cover losses and expenses in reaction to market problems, which makes it difficult for customers to afford them.”
While insurance companies raise rates to cover their losses, homeowners are living with the consequences of market problems. Hodgetta Huckaby, a FAMU alum and Tallahassee homeowner of 38 years, has experienced these changes over the years, but more so over the past three to four years.
“The rates have increased and are steadily increasing,” Huckaby said. “I just feel so badly for those individuals who are having difficulty paying because it is very expensive.”
The spate of hurricanes during the past five years are affecting Huckaby and those around her. The community is reaping the consequences of increasing premiums due to weather changes that cannot be controlled.
With inflation raising prices everywhere, worry settles in for Huckaby and how her community will manage the price increase.
Another long-time resident, Kendall Williams, who has owned in Tallahassee for the last 15 years, has seen changes in his insurance grow about 125% over the years. While the rate increases have been post-hurricane season, the changes have been consistent over the past seven years, he said.
“Rates stay the same for at least a year as most terms are at least that,” Williams said. “They rarely fluctuate; they just increase and once they increase they almost never go down.”
Williams said that when the rate increases, it alters how he can spend his money elsewhere. Taking away money from his variable expenses, such as investments or enjoying the fruits of his labor.
State regulators understand that residents are being affected by these changes in premiums and they have enacted historic and unprecedented reforms designed to promote market stability. Recent legislation that has been passed to address these issues include Senate Bill 76 (2021), Senate Bill 2-A (2022), Senate Bill 2-D (2022), House Bill 837 (2023) and Senate Bill 7052 (2023).
Huckaby believes there is no one addressing this issue and would like to see a change in legislation. By replacing the current Legislature with people who will speak on behalf of the community and ensure they are taken care of.
Williams thinks to solve this issue in the long term that insurance companies should be regulated by non-partisan state boards without political action or lobbyist influences. Or even have incentives to aid with government programs like the Federal Emergency Management Agency fund so they can work together during times of major catastrophes.
While Florida has reforms in action, it will take a while for adjustments to take place and consumers want to see a difference now. One of the bills put into action last year would be the one that insurers would see the most adjustments.
In addition to proposing litigation changes, Senate Bill 2-A seeks to guarantee that policyholders have access to high-value, reasonably priced private market property insurance. This measure removes one-way attorney fees for property insurance, improves the OIR’s regulatory power, establishes a new optional state reinsurance system, and mandates faster communication, investigation, and payment of legitimate claims from insurers.
Overall, while locals have expressed their disdain for the impacts of these surges in costs, Florida is taking action to amend these issues that are affecting homeowners and their insurance rates.