Florida homeowners continue to deal with troubled property insurance market
Listen to the full conversation between WMFE's Talia Blake and Randall Croom, an Associate Professor of Management at Stetson University, in the player above.
The Haves and Have Nots
Citizens Property Insurance has until December 21, 2023 to respond to a request from the U.S. Senate Budget Committee.
The federal government is worried that if another major hurricane hits Florida, they could be asked to bail out Citizens Property Insurance, which is the state-backed insurer of last resort.
Florida homeowners continue to deal with finding affordable property insurance.
A report by the Wall Street Journal in August shows that 12% of homeowners do not have insurance.
Randall Croom, an Associate Professor of Management at Stetson University, said that's double the amount compared to previous years.
"Some people are choosing to, and these are people who have the means to do this, pay off their mortgages and then self insure as a result. Other people are simply choosing to risk it."
According to theInsurance Information Institute, Florida has the most expensive home insurance premiums in the country.
Croom said that's impacting who lives and owns a home in Florida.
"It does appear that home affordability for particularly younger families is becoming a really serious issue. In 1980, 19% of homeowners were younger than 35 years old, but as of 2021, only 12% of people were 35 or younger when they were buying their home."
Fixing The Problem
The Florida Legislature met for a special session in November to address several issues, including property insurance.
Gov. Ron DeSantis signed legislation passed during the special session that adds $181.5 million to the My Safe Florida Home program in an effort to help lower the cost of home insurance for Floridians.
The program provides grants for home strengthening improvements, such as upgrades to your roof, windows, and exterior doors.
Some homeowners may be eligible for the program's match system, where the state will provide $2 for every $1 provided by the homeowner or two-thirds of the project cost up to $10,000.
"Then they can retrofit their properties to make them less vulnerable to some of the main causes of significant or catastrophic insurance claims, especially to hurricane damage," said Croom. "As a result, the hope is that it would decrease the cost of residential property insurance as you're less vulnerable to some of those things."
Although home hardening will be an additional cost to homeowners, Croom said the benefits may outweigh the costs.
He said if more people protect their homes against catastrophic events, like hurricanes, insurance premiums may go down.
"As a result of that, maybe what you paid out in terms of improving your home, you actually save in insurance premiums."
Croom said it will be a while before we know whether the program is successful or not.
But, he said that legislation passed after a special session back in December 2022 have yet to help Florida's troubled property insurance market.
"Bigger Picture, longer term solutions will be necessary. There may need to be some adjustments, for example, to building codes, so that we're not just thinking about how stable, or protected, a place might be today. But by calculating the rate of climate change and its impact, we might think about whether or not the building standards of today are sufficient to meet the needs 20 years from now, and the insurance premiums that will be required to cover that."
What To Do If You Lose Your Property Insurance
The first step is to reach out to your insurance company and agent, according to Croom.
"Some insurance agents know about or carry multiple kinds of policies. So if you've got to trust an insurance agent, they might already have a recommendation for you. That could save you some time and energy."
Hardening your home against vulnerabilities could also help you get reinsured, according to Croom.
He also said to ask your insurance company about nonstandard policies.
"You'll have to actually just talk directly to your insurance company about what some of those might be. Some of those have more flexible eligibility requirements."