Florida's Real Estate Challenge: Home Insurance Costs Rising (Part 3)
Mar 03, 2024
Welcome to part 3 of our series on the Florida insurance challenge.
I'm covering the most significant headwind facing the Florida real estate market currently. π¨
Missed the previous letters? Check them out here:
- Part 1: What's happening to insurance in Florida?
- Part 2: Why are insurance costs rising throughout Florida?
To recap quickly, insurance premiums are have risen nearly 30% across the state in less than 2 years. π₯΅
Insurance carriers have been been offsetting the rising costs of litigation and a number of recent, costly hurricanes impacting Florida by raising their prices.
These higher costs are negatively impacting current owners and prospective buyers (already under pressure with higher rates and home prices).
The question is: what is going to happen with insurance prices in Florida? π€
Well..let's take a look and see!
Will insurance prices come down?
Above you'll see a chart of the total number of lawsuits against insurance carriers in Florida.
This illustrates just how many lawsuits were filed over the past few years.
We quadrupled from 2,000 to 8,000 in less than 2 years. π
In response, our state government passed Florida House Bill 837 designed to essentially eliminate fee multipliers.
Put simply, fee multipliers allowed lawyers to charge 2.5x their normal hourly rate if they were suing an insurance company. π€
It's pretty easy to see why the lawsuits would skyrocket if they're making 250% their normal rate doing it.
The good news is, since the passing of the bill, we've seen the number of lawsuits cut in half. π₯³
Finding Opportunity
Will insurance costs come back down in Florida? Not likely. π’
Will insurance costs stabilize? I think so. π
Florida HB837 is creating stability and more predicability in the business environment for insurance carriers.
In fact, we're seeing insurance companies re-enter the Florida market to offer policies now that they know what to expect. π
More insurance options should mean more competitive rates for consumers.
This is great news for homeowners and prospective buyers as it should lead to more affordability in the housing market. π€©
It won't happen over night, but it will be a positive shift in the coming years.
Next week, we're going to wrap up this series with specific actions you can take to reduce your Insurance bill.
It will be the most valuable of all the parts so be sure to stay tuned. π
Finally, who needs to see this?
Each of these letters are great resources for your existing and prospective clients to stay informed. π°
Be sure to keep your people updated and educated so they can make the best decisions moving forward.
No market is perfect, but if we can get insurance under control, our market is looking incredibly strong! πͺ
Make it a great week! π
Dr. Alex Stewart
Founder
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