One of the questions we get asked most often by our customers is "why is my homeowners premium so high?" Here's our answer:
Hurricanes are a major factor in why homeowners premiums are so high in Florida. Florida's coastline and location create a severe hurricane risk. We are very likely to experience tropical storms, hurricanes, and flooding. Because of the risk of tropical weather, local insurers buy "reinsurance" which is insurance for insurance companies. It is incredibly expensive, which increases costs for homeowners. Also, when insurance companies must pay out to rebuild after a hurricane, premiums will increase to “refill the pot”, so to speak.
Another factor is Florida has a high amount of insurance fraud and litigation abuse, which includes false claims, inflated damages, and fraudulent applications. Once again, when insurance companies have to pay out more on fraudulent claims, they raise premiums for policyholders. These are examples of why insurance carriers raise premiums to cover their exposures each year.