Making sure your biggest investment is properly protected may cost you more.
According to the Insurance Information Institute, homeowner’s insurance premiums in Florida are expected to jump, on average, over 25% this year.
“We’ve had this ongoing issue of fraudulent roofing claims,” said Mark Friedlander of the Insurance Information Institute.
Friedlander said those claims are a big reason why many homeowners have seen increases in recent years. But now another factor could also have a big impact: rising replacement costs.
“It’s been sticker shock for many homeowners across Florida because they didn’t realize why their policy is changing and why it’s so different,” Friedlander said. “Why do I have so much more coverage now?”
Friedlander explained rising labor and lumber costs fueled by supply chain disruptions and inflation mean it will cost more to replace your home in the event of a catastrophic loss during a hurricane or in a fire.
“Many homeowners are getting a renewal bill from their insurer that changed the level of their dwelling coverage,” Friedlander said. “If you change the level of your dwelling coverage and it increased $75,000 over the last year, you’re going to be paying more for your insurance.”
And it’s not just your coverage level that will likely be higher.
“Hurricanes are a percentage deductible off the coverage amount of the home,” said Dulce Suarez-Resnick, an insurance agent with Acentria Insurance. “So if you were insured for 500,000 and now it’s 600,000 and you had a 2% hurricane deductible, which meant you had a $10,000 hurricane deductible, now you have a $12,000 hurricane deductible.”
Suarez-Resnick said many of her clients are having to make difficult decisions on what to do with their policies.
“Be proactive,” she said. “Call your agent, have the tough conversation of what changes we can make to our policy to make it more affordable.”
The price you pay for car insurance is also expected to rise. Friedlander said it could jump anywhere between 3-8% this year.
“When we look at the auto insurance market, there are many similar factors,” he said. “Supply chain disruption, the cost of parts is more expensive, the cost of labor to repair vehicles is more expensive, the cost of vehicles is more expensive.”
Another big factor – accident frequency and severity. Friedlander said there were more crashes in 2021 and they were more severe, so that’s a big reason why many premiums will likely go up this year.
Friedlander said if your car premium increased at renewal, you may want to shop around. You can also ask your agent about any discounts that may be available for a number of circumstances, including: good credit history, bundling your homeowners and auto coverage with the same insurer, student drivers with good grades in high school or college, students living away at school without a vehicle, and low annual mileage.
You may be able to save on your homeowner’s insurance policy if you also insure your car with the same company, increase your deductibles or have a monitored fire or burglar alarm.
But Suarez-Resnick said if you decide to increase your deductible, make sure you can afford to pay it if you end up needing to use your coverage.