South Florida Carriers

 


Why Are There Limited Insurance Carriers in South Florida?


It has been a lingering thought in many people's minds why South Florida has such trouble insuring homes. South Florida includes Broward, Miami- Dade and Palm Beach counties and those counties are known as the TRI- county area. 


When seven different carriers reduced their policies in Broward and Miami- Dade throughout the 2017 year, carriers such as Universal and Citizens had to insure the excess homeowners. In 2018, Universal ended up with over 24,000 additional policies and Citizens accrued more than 5,000 policies. Universal again faced the obstacle of rising reinsurance costs and insurance fraud, when having to cancel or non renew a significant number of policies before the 2021 storm season. Citizens Property Insurance used to be known as a last resort insurance carrier, but now they are the first choice of many homeowners in Miami-Dade and Broward counties.  Other counties that have been denied coverage are Lake, Orange, Seminole and Osceola. Since Citizens is state owned, they are able to provide low prices and are prohibited from increasing rates over 10% annually. Compared to Universal, Peoples Trust and Heritage who raised their rates nearly 10% for the TRI- county area. Some national carriers are working hard to provide bundled options as a means to support policyholders in the area.


Since 2012, there has been an uptick in fraudulent claims in the TRI- county area, none of which resulted from hurricanes or storms. Palm Beach County is a part of the TRI- county area, but only accounts for 5% of residential claims filed against Citizens, while Miami-Dade accounted for 64% and Broward accounted for 24% just in the first 7 months of 2017. All counties outside of the TRI- county area made up the remaining 7%. These fictitious claims make private insurance carriers reluctant to write in the TRI-county area. Carriers have mitigated exposure through canceling policies and declining to renew current ones. Mitigating risk includes educating homeowners about Assignment of Benefits (AOB), which has been a growing issue, especially in Florida. 


This recent increase in AOBs has resulted in decreased coverages and increased premiums. AOB issues are caused by unlicensed contractors being referred to do home repairs. It occurs when a homeowner discovers a water or roof leak and calls a plumber. The plumber typically refers a contractor and the contractor has the homeowner sign documents to do repairs.  The contractor will then file fraudulent claims with a lawyer and take it to court if claims are denied. In 2020, there were over 60,000 AOB claims filed in Florida, which is drastic compared to the 405 AOB claims that occurred in 2006. 


It is important for homeowners to notify their insurance carrier or agent to get repairs fixed by a licensed and approved contractor. This is why Avatar established (RTR) Right to Repair, where they send out their own contractors who are licensed and they know will do a good job. Beware of this and never sign anything prior to discussing the issue with your insurance agent. 


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Elementary is focused on helping you increase your savings, raising your deductible, providing you with discounts and applying credit as much as possible. Learn more about Elementary homeowners insurance products, or if you’re ready to take the next step, call (813) 212-8505 for a FREE no obligation quote.



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