It’s not the news any of us who own a home or plan to buy want to hear. A new forecast by one of the world’s largest “re-insurance” companies predicts your insurance company will pay more for its insurance in the new year.
Re-insurance is simply insurance bought by your insurance company and is often purchased in layers.
Think of it as a cake. At the beginning of the year, they buy a layer of insurance to cover things like wind and rain damage and then a layer of insurance to cover storms, and in June and July, the icing–or top layer to cover hurricanes.
In 2024, it’s predicted your company could be paying as much as 40% more, and guess who’s picking up the tab?
Mark Friedlander with the Florida Insurance Information Institute explained that when insurance companies pay more, they pass those costs to their customers.
A new survey by Gallagher Re, one of the world’s largest re-insurers, predicts re-insurance could cost 30 percent more on average in 2024.
“The hurricane season coverage could actually be higher than the 30 percent estimate that Gallagher Re is putting out right now,” Friedlander stressed.
Some estimates say reinsurance for hurricane coverage could cost companies as much as 40 percent; for some people, it’s the writing on the wall.
“I would love to stay in Florida, but I think the reason I don’t want to is because homes are way more expensive,” stressed Sasank Kaneipati of Fort Myers.
The 23-year-old is starting his career and can’t afford the purchase of a home, along with the taxes and rising insurance costs, and he believes many people his age are in the same situation.
“It just sucks for consumers because it makes everything a monopoly, and you can’t get out of it,” Kaneipati said.
Jodi Kaplan is a Southwest Florida broker and realtor who sees the impact the rate increases have on people.
“People have to move out of the state because they can’t afford to live here,” Kaplan said.
According to Florida agents, more than 1,200 people are moving into the state daily despite the rising insurance rates.
“I think the reality is you get a lot of people here, and they find out, wow! My insurance is more, my property insurance taxes, and we can’t make ends meet,” Kaplan stated.
Ted Murphy lives in Fort Myers and owns two homes in the city. One of them is a rental income, and he, too, is feeling the rising costs.
“The insurance has gone from $1800 four years ago to $2800 to $3400… so yeah, it’s affecting everything,” Murphy explained.
Another rate hike in the coming year could be enough to force him out.
“When everything is fixed up, maybe we’ll think about selling,” Murphy predicted.
Most homeowners have already seen their rates double in the last year. The average cost for home insurance in Florida is now $6,000 a year.
Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.