Increased homeowners insurance rates leave residents concerned

HERNANDO — As hurricanes have ravaged Florida, home insurance costs have surged, putting a strain on the state’s residents.

Deanna Overkamp, 63, who moved to Hernando Beach in the early 2000s, said her homeowners insurance bill doubled compared to 2023, forcing her to shop around for a new policy.

Following hurricanes Helene and Milton, homeowners and insurance agents are fearing another round of insurance rate hikes are coming. According to Florida Realtors, the total estimated insured losses in Florida for Hurricane Helene was more than $1 billion and almost $3 billion for Hurricane Milton as of late October.

“So, the companies will more than likely raise premiums to recoup the losses that they’re paying out,” said Lex Barker, an independent insurance agent and a former Allstate agent in Hernando County.

One projection anticipates about a 7% increase in Florida’s home insurance rates for 2024, according to a report by Insurify, an agency that helps consumers compare and shop for coverage.

During Hurricane Milton, Overkamp’s home was badly damaged. The house had about six feet of water inside. Something smashed into the garage, unleashing a massive flood that swept through the house, ripping shelves off walls and peeling carpet off the floor.

“The whole house was pretty much underwater,” Overkamp said.

Barker, the independent insurance agent, said a three-year pattern of hurricanes have only added to the urgency and anxiety about insurance rates. In a matter of weeks two hurricanes hit Florida destroying homes and displacing families.

“We just got through two this year that [have] caused a tremendous amount of damage and dollar losses,” Barker said.

The average annual premiums for homeowners in Florida in 2019 was $1,988, according to the Insurance Information Institute. In 2020, it was $2,165, and in 2021, it was $2,437. Homeowners insurance prices in 2021 increased by $272 compared to 2020 and by $449 compared to 2019.

Danielle Healis is general manager of Killingsworth Insurance in Hernando County where she has worked for about 36 years. She said consumers should know that fraud and price gouging in the home repair and building industry – as well as people making fraudulent claims – contribute to the rise in homeowners insurance.

Homeowners insurance rates are determined by the home’s overall risk and exposure, along with its history of past losses, Healis said. Coastal areas typically have higher home insurance rates due to their increased risk of damage.

“Insurance carriers are highly regulated by the state of Florida,” she said. “They can’t just, you know, increase their rates without getting approval.”

For residents in high-risk areas, it can be hard to find companies willing to insure them.

Andy Warrener, 46, who lives along the Withlacoochee River, believes that the river’s flooding could lead to his insurance company dropping his coverage.

“I’m gonna make a claim, and then they’re probably going to drop me, and then I’ll have to go look for some more.”

Keith Holcomb, 61, who also lives near the Withlacoochee River, said during the past six years, he has been through five different insurance companies, all of which dropped him because of the high risk of flooding living by the Withlacoochee River. Holcomb is now covered by Citizens Property Insurance Corporation.

“They’ll just say they’re no longer covering, and that’s it,” he said.

In Florida, it’s common for people to be insured by Citizens due to the high hurricane risk and the state’s coastal exposure. Barker said that 20% of the policies he writes are through Citizens. Citizens is the insurer of last resort in Florida and will write policies when others will not.

“If the insurance company doesn’t want to write in Miami, they’re not going to write in Miami because they can’t get enough premium to cover losses.”

The farther north your property lies in Florida and away from the ocean, the less likely you are to need coverage through Citizens, as more options with other insurance companies are available, Barker said. However, the farther south you are, the higher the risk becomes.

Barker said he can only write insurance policies through Citizens after he has received two rejections from other insurance companies.

Barker writes policies for homeowners insurance by accessing the tax rolls to gather information about the house, such as, whether it is one or two stories and its square footage. He then inputs the details into TurboRater, a tool that helps insurance agents compare quotes from multiple carriers to find the best coverage. TurboRater provides Barker with the top five companies offering the best rates, which he then presents to his clients.

“Each company has a different rate, of course, depending on their loss history. So, if one company has had a tremendous number of losses in a certain area, their rates are going to be higher than another company that could be in the exact same area that didn’t suffer the same losses.”

While both homeowners insurance and flood insurance have increased, flood insurance has risen at a slower rate than homeowners insurance, Healis said.

Flood insurance is a national program that the federal government handles while homeowners insurance can be purchased through independent agencies, Barker said.

“The damage to your house from rising water from the ground up, that’s flood insurance,” Barker said. “If your damage from the rain and down from, like, your ceiling, that’s your house insurance.”

Kathy Orloff, 63, has lived in Hernando Beach since moving there from New York in 2010. She experienced significant losses during Hurricane Helene when three feet of water flooded her home. Many of her belongings ended up piled in two large heaps on her front lawn.

Orloff said that she didn’t experience much wind damage during the hurricane, meaning that most of the repair costs would need to be covered by flood insurance rather than homeowners insurance.

Healis explained that flood insurance is most likely to cover most of the costs from the last two hurricanes, as the storm surge in Hernando Beach and flooding from the Withlacoochee River caused significant damage.

Due to the homeowners insurance rates, many homeowners are now choosing not to purchase coverage.

Healis said that going without home or flood insurance is not worth the risk, as the cost of rebuilding after a hurricane is extremely high. Many people have their entire savings tied up in their home purchase and don’t have the funds to repair it afterward if they’re not insured. Also, the costs of materials and labor are constantly increasing, making rebuilding even more expensive.

“I think (not having homeowners insurance) is going to hurt them financially because when you go through a time frame where there’s no claims and no storms, it doesn’t seem like such a bad idea until you get hit with one and realize the huge impact by not having that coverage,” she said.

Homeowners can take steps to potentially reduce their insurance premiums by replacing outdated roofs, adjusting deductibles and modifying coverage limits for their homes, Barker said.

The time it takes for insurance companies to process payments depends on the extent of the damages to a homeowner’s property. Those completely displaced by the hurricane are usually prioritized and given money until their claim is finalized.

A major impact of the rising homeowners insurance, Healis said, is that a lot fewer people are buying homes because they can’t afford the insurance, or they are not buying homeowners insurance at all.

“I think that’s going to affect the whole homeowner’s market greatly because of that.”