JACKSONVILLE, Fla. – It continues to be a hot topic in Florida: The property insurance crisis that’s resulted in skyrocketing premiums for homeowners and more than a dozen insurance companies that have stopped writing policies in the state.
The crisis is also affecting the real estate market as homebuyers are finding it increasingly difficult to secure property insurance, according to the experts. And it’s not just potential buyers along the beaches who are hitting property insurance roadblocks.
“The past two years I was dropped from mine. They left the state, so I had to find new ones two years in a row,” homeowner Jennifer Zinn said.
Zinn knows what it’s like to search for a new property insurance company, anticipating a 40%-50% increase in her premium when her policy renews again this year. But it’s not only homeowners experiencing property insurance barriers.
Buyers are also experiencing difficulties getting insured, even on new properties.
“We’re hearing from realtors that are extremely concerned that they cannot close on properties they are selling because the homeowner will be unable to obtain property insurance to make that sale go forward,” said Mark Friedlander, spokesman for the Insurance Information Institute.
Friedlander said 56 property insurance companies were operating in Florida at the beginning of last year. But right now, only 47 are offering policies in the state and half of them are on what’s called a watch list because of their financial health.
“So that’s very concerning as we’re just getting into hurricane season,” Friedlander said. “Potentially, we could see more failures this year.”
And because the pool of insurance companies continues to shrink, experts say insurance companies are being pickier about which homes they choose to cover.
Coverage is being rejected for:
- Homes with older roofs
- Properties that have had lapse in coverage
- Owners who have filed insurance claims in the past
Houses being used as short-term rentals are also being rejected by insurance companies and some carriers are refusing to write policies for homes with solar panels installed.
Friedlander said families that are already in their homes, facing huge policy increases, are also being forced out.
“Certainly, we are hearing now from homeowners that can no longer afford their properties,” he said. “They can’t pay the insurance bill. They need to sell their homes.”
Earlier this week, insurance giants AIG and Farmers Insurance both announced that they were scaling back their coverage in the state. Over the past 13 months, seven Florida insurers were declared insolvent.