MIAMI – Florida‘s property insurance market is in trouble as mounting losses by insurance companies and rising premiums threaten the state’s burgeoning real estate market, according to insurance executives and industry analysts. Longtime homeowners are being hit with double-digit rate increases or notices that their policies will not be renewed. Out-of-state home buyers who have flocked to Florida during the pandemic are experiencing a etiquette shock. Insurers swimming in red ink are cutting coverage in certain geographic areas to shore up their finances.
Several factors are at play, say insurance analysts and executives. Two hurricanes that hit the state, Irma in 2017 and Michael in 2018, generated claims with an estimated cost of about $ 30 billion. The cost of reinsurance, which insurers hire to cover part of the risk of the policies they sell, is increasing. Of particular concern, executives say, are excessive litigation over insurance claims and the proliferation of what insurers see as false roof-related claims. A large group of Florida homeowners insurers followed by Marsh McLennan’s Guy Carpenter business had $ 1.58 billion in underwriting losses in 2020, more than double the $ 664 million loss in 2019. An expanded version of this Article appears on WSJ.com Popular WSJ.com Stories: