(The Center Square) – Florida homeowners insurance policies are becoming more expensive, but officials say improvements are in sight as more companies enter the market.
On Tuesday, the Florida Senate Banking and Insurance Committee heard an update from the state’s insurance commissioner and the state’s property insurer of last resort.
The insurance market in the Sunshine State has become extremely expensive due to many factors, including a glut of lawsuits against insurance companies, inflation and extreme weather events.
Because it is also becoming increasingly difficult to obtain insurance, many residents are opting for coverage through the Citizens Property Insurance Corporation, the state’s insurer of last resort.
During the committee meeting, Florida Insurance Commissioner Michael Yaworsky provided an update on the state’s real estate market. Yaworsky noted that the reforms state lawmakers made during the 2023 and 2022 legislative sessions were historic.
Yaworsky emphasized that since the legislation came into effect, the insurance market is beginning to experience positive growth. Five insurance companies began doing business in Florida in the past year.
“We are seeing quite positive results again from the legislation that has been passed, many companies are acting with optimism… People had to be convinced that this was a viable market and that the future was relatively bright” , Yaworsky said. adding that there are at least two other insurance companies currently in the creation phase.
Yaworsky also noted that inflation has a huge impact on insurance rates by increasing the estimated costs to rebuild and repair homes destroyed by natural disasters. The enormous risk of flooding in Florida makes the situation even worse.
Citizens Property Insurance Corporation President and CEO Tim Cerio said some issues affect not just those insured with Citizens, but most policyholders across the state.
“Clearly, we have a mandate from the Legislature to be both actuarially sound and non-competitive…Currently, Citizens’ rates are mostly actuarially unhealthy, typically 30 to 40 percent below market,” Cerio said, adding that this puts policyholders at risk. .
Cerio added that citizens should not be competing with private insurers, but that is exactly what is happening, and stressed that litigation is expected to decrease as reforms begin to take place. apply to the system over the next 18 months when people start moving. once again on the private market.