Two agents share consumers’ experience
I had the pleasure of sitting down last week with two veteran insurance agents on the frontline of Florida’s topsy-turvy property insurance market. They revealed the hidden consequences that higher insurance premiums are having on their clients – and the impact now on Florida’s real estate market. We recorded our conversation as the latest podcast on The Florida Insurance Roundup, aptly named “Florida’s Property Insurance Dilemma.”
As we’ve been reporting here, Florida’s residential and commercial property insurance market is in a precarious state of flux, for both companies and consumers. Old hurricane claims, litigation abuse, and fraudulent repair tactics have led to big underwriting losses and rising reinsurance rates. These are being passed along to Florida residents in double-digit rate increases – some as high as 50%.
“Sometimes we have to have uncomfortable conversations with clients who don’t want to keep insuring the property, they just want the liability (coverage),” said Ana Regina Myrrha, CEO of the American Insurance Point agency in Orlando and a 23-year insurance agent. “I see people taking a greater risk because they cannot afford to pay for the insurance.”
The availability and affordability issue is even more advanced in South Florida, with many clients seeing rate increases of 20% to 40%, according to Dulce Suarez-Resnick, Vice President of Personal Lines for Acentria Insurance Associates in Miami. “In the last two years, more and more of our markets have shut down,” said Suarez-Resnick. She said many policies have restrictions, including roof age requirements of under 10 years old. Those clients have little choice than to be placed with Citizens Property Insurance Corporation, the state-backed insurer of last resort, whose policy count has exploded in the current dilemma.
Both agents told me the situation has begun impacting home affordability and the Florida real estate market. “Eventually what’s going to happen with people is that they are not going to be able to afford that mortgage payment because their insurance is escrowed with their taxes. And it’s just becoming a dilemma,” said Suarez-Resnick, a 36-year agent in Miami who serves on the Citizens Property Insurance Corporation’s Agent Roundtable.
Some insurance consumers are increasing their deductibles to help reduce the premium increases. The usual 2% hurricane deductible is now offered at 5%. Myrrha worries that some who had regular $1,000 all other perils deductibles are pushing their deductibles to $2,500, $5,000, and even $10,000. “The clients that choose those deductibles, can they afford to pay them in case of a catastrophe? Probably not.”
Another issue is door to door solicitation by roofing firms offering new roofs that they convince the homeowner their insurance company will have to pay for. “To make matters worse, it’s not only the client. Now I have realtors encouraging clients to file claims to replace the roof in order to get the house sold,” said Myrrha.
My guests also shared their strong views on some of the insurance market and litigation reform bills being considered by the Florida Legislature. I hope you’ll take time to listen to our conversation or read through the podcast’s show notes to find other details of our chat as well as relevant information and resources we discussed.
LMA Newsletter of 3-29-21