Florida Insurance 3x!

[Jason Medina]

Just received a call from my insurance broker that my current insurance company is no longer covering hurricane insurance.  They recommended another insurance company who is charging 3x my current rate... you know it's bad when your broker yells out JC's name in the middle of a comparison.  

[Drew C Grossman]

Quote from @Jason Medina:

Just received a call from my insurance broker that my current insurance company is no longer covering hurricane insurance.  They recommended another insurance company who is charging 3x my current rate... you know it's bad when your broker yells out JC's name in the middle of a comparison.  

Hey @Jason Medina - What is going on in Florida is super interesting. You have major insurance companies “pulling out” of Florida…don’t be scared they haven’t left everywhere but definitely certain locations as we have seen.  

You have places like Orlando, which have increased 2-3x in some cases like you noted. Few reasons why..

#1 Insurance fraud…Florida holds the highest percentage of the country’s residential insurance claims at 80%…mind blowing when you really think about it. A lot of this has to do with roofing claims 

#2 Recent hurricanes have added a ton of rain to the water table and lakes that certain parts of Orlando that were high and dry ….flooded. This is causing insurance companies to re map certain areas driving the price of insurance up. 

#3 Most of Orlando is older and the homes are older with that…causing insurance to be more expensive. 

New construction is the only place I have seen decent quotes. My new construction rentals in Ocala are around $450-$600 yearly…3-4x more expensive in other areas like Tampa, Jax, South Fl ect..

[Michael Norris]

@Jason Medina The insurance market in Florida was a disaster before the hurricane hit. 6 carriers went insolvent last year and more will probably fail this year after the claims get sorted out.

[Patricia Steiner]

Florida's insurance sector is in crisis.  Florida, Texas, Louisiana and more are considered high risk states and we've all had the hurricanes to prove it.  Rates won't be dropping any time soon and the engagement requirements are costly - there's no insuring with a roof that is 15 years old and without 5 years of life remaining, any out-of-code electrical and/or plumbing, and foundation or AC issues.  Just not going to happen.

The bigger issue is this:  the insurance industry doesn't work well for anyone anywhere.  Insurers want you to pay - but if you make a claim, the property is tagged for 7 years or longer on a national registry resulting in higher rates for the current and future owners.  

There's a lot been published on how the insurance industry will most likely bring down the real estate market/segments - not higher interest rates, not mortgage issues, not fraud/stupidity.  We need options for insuring properties that is beyond what is offered today.  It's just nuts...

[Clint Galliano]

Louisiana is starting to see new policies written with a 3-5 percent hurricane deductible and a minimum of $400,000 of coverage on a residential personal home. The company my rentals are insured with is not writing new policies in Louisiana. Luckily, they are not dropping me. Not a whole lot of options for homeowners or investors in the state. 

[Paul Pratt]

Nobody in here mentioned one of the biggest problems for insurance yet. If you've seen the "FREE NEW ROOF" signs or people knocking on your door promising you a free new roof. This Is a major issue and why many insurers can't stick around. The roofing company submits a claim with the insurance company, and then threatens a lawsuit if the company challenges the overpriced roof costs submitted. So yeah, If you're working in insurance you are pinholed to replace a roof. But then you have to increase premiums so homeowners are still screwed.

[Ralph Chiaia]

So what do you do if you hold older properties near the water? How can you get wind insurance. My lender is asking us to add hazard insurance but it's 3-4x our homeowner's insurance. What gives? 

[Jason Medina]

Over the year, as leases expire, I am renovating and then putting each property on the market to 1031 into Arizona.  No hurricanes there and my roof actually lasts longer than 15 years!

[Kristina Kuba]

@Jason Medina

I recently shopped nearly 10 brokers for two of my personal properties as both of the policies drastically increased on renewal. I found Professional Insurance to be the lowest out of all of them.

Gunnar Schafers

Professional Insurance Services

13907 Carrollwood Village Run

Tampa, FL 33618

[Kenny Hollaway]

Quote from @Jason Medina:

Just received a call from my insurance broker that my current insurance company is no longer covering hurricane insurance.  They recommended another insurance company who is charging 3x my current rate... you know it's bad when your broker yells out JC's name in the middle of a comparison.  

 Adding hurricane clips lowered my properties new insurance policies about 30%. I’m in the Orlando area if you have questions. 

[Tim Bee]

Probably a good time to consider buying property in a nice dry arid area where you don't have to worry about hurricanes 

[Rob Hardie]

Quote from @Kenny Hollaway

Adding hurricane clips lowered my properties new insurance policies about 30%. I’m in the Orlando area if you have questions. 

Kenny - who's your insurance provider? I'm closing in a few weeks and need to find insurance. Thanks

[Jeff T.]

John Schaub (he wrote Building Wealth One House at Time) self-insures his Tampa properties (for property damage, he has liability ins.).  Of course you need to have it paid off, but this is a possible option, depending on your situation.

It didn't seem like a good idea until insurance tripled and you can buy a new roof every 2 years for what insurance costs.

[Jeff T.]

Also, my understanding is that newer homes (2017 and newer I think?) have rates significantly lower due to the latest building codes in Florida

[Kenny Hollaway]

Quote from @Rob Hardie:

Quote from @Kenny Hollaway

Adding hurricane clips lowered my properties new insurance policies about 30%. I’m in the Orlando area if you have questions. 

Kenny - who's your insurance provider? I'm closing in a few weeks and need to find insurance. Thanks

Sorry for the delay. I have all my properties through Noelle at Ricci insurance.  

[YM D.]

Work in Insurance on the brokerage and carrier side. Premiums have gone crazy everywhere because of increased building costs, reinsurance rates, and claims. Coastal & Catastrophe zones hit the worst but even places like NYC have seen major rate increases and carriers pulling out of the market. 

As @Jeff T. said, there's been a tremendous shift in demand towards self-insured solutions. Been working with a bunch of groups down in FL (and others nationwide) wanting to set up captives. When carriers are charging these rates with a 5-10% TIV deductible for wind claims, you're pretty much self-funded anyway - i.e., the same downside...might as well bear the upside of self-insurance at that point. While captives tend to take 3 years to begin really seeing the profits & cost benefits, in the FL market, major benefits can be reaped in Year 1