Hurricane Fears in Florida Still Driving Up Homeowner's Premiums

For the first time in history, more citizens are leaving the state of Florida than are coming in. It's not because there is a mass fear of "the big one" blowing ashore, ripping our houses from their foundations and tearing lives apart. It is due to the insurance crisis in our state. Many Floridians, at least some of the lucky ones who still have homeowners insurance, are having to drop it due to the skyrocketing premiums, high deductibles, and decreased coverage. They will be left homeless in the case of a major catastrophe.

I recently bought a house, my first ever. I knew to expect high insurance premiums. I knew I would have to get a smaller house to accommodate those premiums. I didn't expect to have to pay $3,000 per year to insure my $150,000 home. I didn't expect to have no options in choosing an insurance company. My only choice was Florida's Citizens insurance, the state-run "insurer of last resort." Even through my shock, I have heard stories that are worse than mine. Those stories include premiums that have tripled in the last couple of years, people who have had the same policies with the same insurance companies for decades who are getting dropped even though they have never filed a claim, people who are having to sell their homes to buy smaller condos because paying those premiums is an impossible feat.

2004 was not a good year for Florida. The Tampa Bay area, where I live, was expecting a direct hit from hurricane Charley. The storm surge was expected to swallow up many coastal area homes and flood many others further inland. Many residents fled the area, some driving to nearby Orlando, a couple of hours inland, to escape the expected surge. Charley had other plans, though, swirling in south of the Tampa Bay area and blowing directly northeast, right through the Orlando area. Those citizens who were trying to escape the storm ended up right in its path. I decided to stay home and tough it out, lucky for me as it turned out, but I was on the phone and internet (at least until they lost power) for hours with some of my friends, many of them terrified they wouldn't survive. Florida would also see hurricanes Frances, Ivan, and Jeanne before the season was through. Thousands of homes were lost or heavily damaged, the total cost was in the billions of dollars for our state.

When I started my search for a new home early this year, I was encouraged by reports of legislation that would provide relief with our homeowner's premiums. The state would sell less expensive reinsurance to insurance companies, backing up their reserves so that they didn't have to purchase it from other companies who could easily take advantage of the situation. That plan, however, never seemed to materialize. Homeowner's rates are still sky high, and still climbing. Insurance companies still aren't writing new policies unless you own a home that was built within the last three years. The latest I've heard is that legislators would freeze the rates for Citizens insurance, so our rates won't increase next year. That is encouraging, but I hate to say that I will believe it when I see it.

So far, we've had a quiet hurricane season. So-called experts are still predicting a heavy season, but no one really knows until it's all said and done. If the season continues to be slow and uneventful, it will be interesting to see what insurance companies do to appease Florida residents at the end of the year.