Hurricanes Helene and Milton had notable impacts on Florida properties, though they didn’t make direct landfall. Helene’s outer bands caused heavy rain and strong winds, leading to flooding, roof damage, and fallen trees along the eastern coast. Milton’s more significant winds and storm surges impacted the Gulf Coast, particularly vulnerable waterfront properties. Coastal areas experienced erosion, flooding, and property damage. Both storms resulted in increased insurance claims for roof repairs, water damage, and structural repairs, highlighting Florida’s vulnerability to hurricane-related property damage. This article will examine the insurance impacts of recent storms and what you can do to offset these increases.
These types of events typically impact insurance rates and coverage in significant ways, such as:
- Increased Claims and Payouts: Hurricane damage typically leads to a spike in insurance claims. The more damage caused by storms, the higher the payouts insurance companies have to make. When insurance companies pay out large sums, they may adjust premiums in the following year to recover those costs. As a result, homeowners’ insurance premiums may increase after an active hurricane season.
- Risk Assessment Adjustments: Insurance companies regularly reassess the risks associated with insuring homes, especially in hurricane-prone areas like Florida. After a season with multiple storms, insurers may adjust their risk models to reflect the heightened likelihood of future storms. This may lead to higher premiums for homeowners in high-risk areas, particularly along the coast and in flood zones.
- Availability of Insurance: In the aftermath of major hurricanes, some insurance companies might pull back from offering coverage in high-risk areas or may stop writing new policies. This could reduce competition in the market and result in higher premiums from the remaining insurers, including state-backed providers like Citizens Insurance.
- Reinsurance Costs: Insurers often rely on reinsurance (insurance for insurance companies) to cover the costs of catastrophic events like hurricanes. If hurricanes cause significant damage, reinsurance companies may raise their rates, and insurers may pass those increased costs onto consumers. These insurance impacts can contribute to higher homeowners insurance and property insurance premiums.
- Regulatory Changes: Florida lawmakers have occasionally responded to active hurricane seasons by implementing insurance reforms to protect homeowners. However, while some changes may provide short-term relief, active seasons with numerous storms can pressure the insurance market, and insurers may still be forced to increase rates to cover potential future losses.
- Long-Term Impacts: Even if an active hurricane season in 2024 didn’t result in widespread destruction, ongoing risk management would likely drive long-term premium increases. Insurers may forecast an increase in storm activity in subsequent years, causing them to raise rates across the board to mitigate future risk.
Florida lawmakers have been working on ways to stabilize the insurance market, including efforts to reduce rates through reinsurance support and increased competition. If reforms are successful, they could help offset some of the premium hikes triggered by the hurricane season.
Anderson & Associates Insurance Can Help You to Navigate Insurance Impacts
The combination of increased claims, higher reinsurance costs, and the need for insurers to adjust their risk models can lead to higher homeowners’ insurance premiums in Florida. These insurance impacts can seem overwhelming to residents who have had to spend significant amounts of their own money to offset damages they have suffered.
Whether or not your property was damaged in the 2024 hurricane season, it is smart to reassess your current insurance policies and determine if you can get better coverage or lower your premiums. Call Anderson & Assoicates Insurance Group to evaluate your current policies and advise you on changes you can make to improve your situation. Our team can help with recommendations for home renovations that may lower insurance premiums. We can also search multiple insurance providers to determine if another company may work better for you. Don’t face rising insurance costs alone – call Anderson & Associates today.
