Our agents Ryan Reynolds & Lindsey Rounds shared a couple of their most frequently asked questions received from their clients:
Why did my rate go up, even when I didn’t have any claims?
Why are Florida homeowners and auto rates so high compared to my insurance up North?
Believe it or not, Florida is the highest risk state in the U.S when it comes to insurance. The increased risk is due to several components that each have a significant financial impact on the insurance industry. These would include acts of nature, cost of reinsurance, and insurance fraud. Many national insurance carriers that you’re used to seeing advertised aren’t willing to write insurance in our little slice of paradise, because of those very same reasons.
“Acts of Nature” are pretty prevalent in the state of Florida, especially hurricanes. Hurricanes are known for leaving paths of destruction, resulting in large losses which at times can impact entire regions of homeowners. The likelihood of experiencing this is much higher than a non-coastal state, thus impacting our rates.
“Carrier Reinsurance” is essentially insurance for insurers, where carriers can transfer portions of their risk portfolios to other parties with some form of financial agreement. Reinsurance is necessary so that insurance companies do not become insolvent when unusual or major events occur. Hurricanes can result in both large claim amounts as well as a large volume of claimants and have historically put insurance companies out of business. There of course is a cost to the insurance carrier to do this, and as those costs rise, they eventually have an impact on our overall rates.
Insurance Fraud is unfortunate, especially because it impacts so many of us that couldn’t imagine committing fraud. In most recent years, the abuse of the “assignment of benefits” policy provision has become rampant in our state. These have led to larger than necessary claims paid to vendors instead of policyholders. These AOB vendors are taking advantage of insurance carriers, oftentimes maxing out coverage limits through policyholder claims. So many consumers aren’t even aware that it is happening, and unknowingly sign an Assignment of Benefits contract for their necessary repairs. Always consult your agent if you are presented with an Assignment of Benefits contract.
With all that being said, I guess you can say that we all seem to pay the price in order to have the beach in our “backyard”. Luckily our agency can help! Speak with our team and we take the time to help you have a better understanding of your policy and what options you have available. We’d love to earn & retain your business.