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AudibleWhat’s going on with property insurance in Florida? Specifically rates, coverage, condominiums, automobile insurance, telematics, flood insurance, and the reinsurance costs that carriers pass along to consumers.
Former Florida Deputy Insurance Commissioner Lisa Miller gets to the heart of the issues with three experienced insurance agents in South, Central, and North Florida who share their insights and suggestions on improving Florida’s challenging property insurance market.
Jay Wolfberg, President, We Insure
Ana Regina Myrrha, Agency Principal and Broker, American Insurance Point
Paul Lalonde, President, Insurance Wagon
Show Notes
Host Lisa Miller and guests discussed the high premiums affecting homeowners and auto insurance, driven by catastrophic weather, inflation, litigation, and reinsurance costs. Positive trends such as rate decreases and more flexible coverage options are highlighted. The conversation also covered the critical need for flood insurance and the role of the news media in educating the public about insurance complexities and how agents can help the media do so. The episode underscores the importance of transparency and proactive communication in the industry.
Miller’s guests each brought unique perspectives from different regions of Florida:
- Jay Wolfberg, President of We Insure, headquartered in Sunrise. Wolfberg has over a decade of experience in commercial and residential property insurance. He discusses positive trends in the market, including rate decreases and more creative coverage options.
- Anna Regina Myrrha, Agency Principal and Broker at American Insurance Pointe (AIP) in Orlando. Myrrha shares insights on the stabilization of rates and the importance of adapting coverage to meet clients’ needs.
- Paul Lalonde, President of Insurance Wagon, a Jacksonville insurance agency. Lalonde provides a perspective on the homeowners as well as the commercial insurance market and the challenges posed by recent legislation affecting condominium insurance.
Overview of the Florida Insurance Market
Host Miller highlighted the current state of the Florida insurance market, where premiums for automobile, homeowners, and commercial insurance are at an all-time high. She identified four main factors driving these rates:
- Catastrophic Weather: Florida’s susceptibility to hurricanes and other severe weather events significantly impacts insurance costs.
- Inflation: Rising costs of goods and services contribute to higher insurance premiums.
- Litigation: Legal fees and settlements from lawsuits lead to increased insurance costs.
- Reinsurance Costs: The cost of reinsurance, which insurers purchase to protect themselves from large claims, is a significant factor in premium pricing, comprising upward of 40% of a homeowners insurance premium.
Host Miller emphasized the uncertainty surrounding reinsurance costs, especially with the ongoing hurricane season, and the potential for higher rates if a significant hurricane occurs.
Positive Trends in Homeowners Insurance
Rate Decreases and Stabilization
Host Miller highlighted a recent report from the Florida Office of Insurance Regulation that 12 companies have requested rate decreases, while 25 have sought to maintain their current rates. For example, American Integrity Insurance Company has announced a nearly 7% rate decrease for a significant number of policyholders.
- Lalonde’s Perspective: In North Florida, rates are stabilizing, though not decreasing as much as hoped. A software tool tracking renewal rates shows a shift from increasing rates to more stable or decreasing rates.
- Myrrha’s Insights: Her office is experiencing more manageable rate increases, with many quotes being equal to or better than previous years.
- Wolfberg’s Observations: In South Florida, there is cautious optimism with many carriers offering rate decreases and more creative policy options. Customization in coverage is becoming more important to fit clients’ budgets.
Flexibility in Coverage Options
The discussion shifted to the flexibility of coverage options. Wolfberg noted a return to common-sense underwriting, allowing for more creative coverage options, particularly regarding roofs and other property features. Myrrha agreed, noting that companies are now willing to adapt policies to meet clients’ needs, such as offering limited water damage coverage or adjusting liability limits. Lalonde noted that recent legislation requiring milestone inspections of condominium buildings has led to increased commercial insurance premiums and difficulties in finding coverage for high-value properties.
The Auto Insurance Landscape
Rate Increases and Stabilization
Host Miller raised concerns about potential rate increases in auto insurance. Myrrha noted that while there was a period of rising rates, she has recently observed stabilization and even decreases in some cases. However, Wolfberg pointed out that auto insurance rates are still on the rise, driven by the increasing costs of repairs due to advanced technology in vehicles.
Telematics Programs
Lalonde discussed the growing acceptance of telematics programs among clients, which track driving habits and can lead to significant discounts. Initially, there was apprehension about privacy concerns, but many of his clients are now recognizing the potential savings.
Reinsurance Costs and Flood Insurance
Understanding Reinsurance Costs
Host Miller explained that a significant portion of Floridians’ insurance premiums (up to 40%) goes toward reinsurance. She highlighted a recent article discussing the need within the reinsurance industry for higher rates to support the cost of reinsurance, particularly in light of worsening weather conditions. Lalonde noted that consumer awareness regarding reinsurance and the factors driving insurance costs is increasing. He said that educating clients about the underlying costs of their premiums is crucial.
The Importance of Flood Insurance
Wolfberg noted that many homeowners insurance carriers are becoming hesitant to offer flood endorsements. However, he emphasized the importance of flood insurance in Florida, reminding listeners that the entire state is considered a flood zone. Myrrha and Lalonde agreed, stressing the need to encourage clients to purchase flood insurance, especially in light of recent flooding events in areas that had previously been considered low-risk.
The Role of Media in Insurance Education
Host Miller raised the topic of media representation of the insurance industry, expressing concern that insurance agents often face skepticism from reporters and the public. She encouraged her guests to engage with local media to help educate the public about the insurance industry and dispel misconceptions. Myrrha talked about how she is regularly quoted in stories and that helping educate reporters has made a big difference in the quality and depth of coverage. Lalonde added that while there is often criticism from local media, there is also an opportunity to educate consumers about the complexities of the insurance market. Building relationships with media outlets can foster a better understanding of the industry.
Conclusion
The episode of the Florida Insurance Roundup podcast episode provides valuable insights into the current state of the Florida insurance market, highlighting both the challenges and positive trends. The guests share their experiences and perspectives, emphasizing the importance of flexibility in coverage, consumer education, and the need for ongoing dialogue with the media. As the insurance landscape continues to evolve, the insights shared in this episode serve as a reminder of the critical role that insurance agents play in navigating these changes and advocating for their clients.
Key Takeaways:
- Stay Informed: Keep up with the latest trends and changes in the insurance market to make informed decisions.
- Customize Coverage: Work with your insurance agent to tailor coverage options to fit your needs and budget.
- Consider Flood Insurance: Given Florida’s flood risk, ensure you have adequate flood insurance coverage.
- Engage with Media: Insurance agents should proactively engage with media to educate the public and dispel misconceptions.
By following these insights and recommendations, consumers and insurance professionals alike can better navigate the complexities of the Florida property insurance market.
Links and Resources Mentioned in this Episode
Number of Carriers Grow as Rate Hikes Shrink (LMA Newsletter of August 19, 2024)
Florida Property Insurance Market Stats, Data and Facts (Florida Office of Insurance Regulation)
Property Insurance Stability Report (Florida Office of Insurance Regulation, July 2024)
P&C reinsurance market is reaching a new level of equilibrium, says Swiss Re CFO (Reinsurance News, August 23, 2024)
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** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to [email protected] **
The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers’ Compensation, and Surplus Lines insurance from around the Sunshine State. Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs. On the web at www.LisaMillerAssociates.com or call 850-222-1041. Your questions, comments, and suggestions are welcome! Date of Recording 8/28/2024. Email via [email protected] Composer: www.TeleDirections.com © Copyright 2017-2024 Lisa Miller & Associates, All Rights Reserved
