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Everyone wants to know: Why is insurance so expensive? Why did my rates go up when I haven’t made a claim? Why am I still paying out of pocket for repairs?

Unfortunately, the answer isn’t simple, but there are reasons why insurance rates fluctuate. In many places—Florida in particular—home insurance is where the most fluctuations happen and they’re currently the most frustrating area for homeowners and policyholders.

Let’s dive deeper into what makes for a hard insurance market and what that means for you as a homeowner.


What Factors Into Home Insurance Prices

For the most part, the major elements that factor into home insurance rates for Florida homeowners are the same for homeowners anywhere.

The age of your house, the amount of equity you have in the home, the location, and your level of coverage are all major factors.

Older homes or those built with cheaper materials will cost more to insure because the likelihood of expensive repairs is greater. The sturdier the bones of your home—the foundation, roof, and construction materials—the better you’ll look to home insurance companies.

The more equity you own in your home vs. how much you might be paying toward a mortgage also increases your chances at having a lower monthly premium.

Location is a crucial element as well, and in Florida that takes into account beachfront property and flood zone in addition to crime rates in your area. The likelihood of natural disasters in your area is a crucial element in your insurance coverage and premium costs.

Finally, the level of coverage you select is a key component to your home insurance premiums. As with all insurance policies, the less coverage and fewer policies you have, the lower your premium will be. It might be OK in the short term but in the event you need to make a claim, it could come back to haunt you.

More factors can come into play here, such as whether you are a single or married homeowner, if you have a pool or trampoline, and your proximity to a fire station. Ultimately, there’s a lot more to home insurance than you might think, so you should always speak with your insurance agent so you’re clear on your coverage.


What makes for a hard insurance market?


What Is a Hard Market?

Florida homeowners are susceptible to all the same factors as homeowners across the country when it comes to their rates. However, in recent years, there have been a few unique elements that have influenced the current climate.

This has led to what insurance companies call a “hard market.

A hard insurance market means there is a decrease in coverage availability, stricter underwriting standards, and higher premium rates. Insurers are more selective and have more stringent requirements for policyholders to obtain coverage.

Unfortunately, this usually means less competition among insurance providers and less favorable terms for consumers.

A lot of things can lead to a hard insurance market, including natural disasters, economic factors like inflation and recessions, regulatory changes, and low investment returns. In Florida and many other states, the major cause of the current hard market is natural disasters. 2017 was the costliest year on record for natural disasters between three major hurricanes and California wildfires. All that damage needed to be accounted for, and with more disasters following (plus inflation climbing), it was the perfect environment for a hard insurance market to form.

This is challenging for homeowners because it seems like your coverage is out of your hands.

However, it’s essential to understand that insurance markets are cyclical. Maintaining your property and staying connected with your insurance agent are key to navigating a hard market and keeping your coverage strong without overspending on your premiums.


How You Can Stay Informed and Covered

There is no crystal ball telling us when a hard market will soften, but there are ways you can navigate the hard market.

  1. Shop around and work with an insurance agent: Shopping around is always the best way to find the best prices. And working with an independent insurance agent who understands the market as well as your specific needs puts you even further ahead. An agent will also keep you informed on industry news and trends.
  2. Review and adjust your coverage: You might want to reassess your coverage needs and drop any unnecessary coverage you may have. You might also find opportunities for bundling your coverage if it will get you a discount. When dropping coverage, just make sure it’s not anything necessary that will end costing you in the long run.
  3. Improve home safety and security: Installing safety features like smoke detectors, fire alarms, and security systems makes your home more desirable and could qualify you for discounts or reduced premiums at the same level of coverage. Staying on top of general home maintenance also makes you a more attractive policyholder. Don’t wait to get your roof or trees inspected.
  4. Don’t file small claims if you can avoid it: The fewer claims you file, the better you look to your insurance company. If you can repair it yourself and/or pay for it out of pocket, don’t make a claim.


Couple signs insurance paperwork with agent.


Let Brown Insurance Services Guide You Through the Hard Market

At Brown Insurance Services, our clients come first, so we understand what a difficult and uncertain time this is for Florida homeowners. After all, we’re Florida homeowners ourselves.

When you come to us, we work for you, not the insurance companies, and that’s why we’ll do our best to find you the coverage you need at the price you can afford. We put your best interests at the forefront always.

So contact us today to talk about your home insurance policy and how we can help you find the best fit.

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