ORLANDO, Fla. – Before Hurricane Ian, Florida’s insurance market was already in crisis. Now many consumers are on edge about how their premiums will change after the storm.
Industry analysts say there could be 20% to 30% increases, on top of the increases consumers have already seen.
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Governor Ron DeSantis is calling for another special legislative session before the end of the year. The question is will it offer relief?
Many Floridians hope so but did not see lower costs after the last special session.
Sheila Guzman says every year her anxiety starts when it’s time for her property insurance to renew, and this year is no different.
“Because I don’t know what to expect,” Guzman told News 6.
According to her statements, in 2020 her premium was $815.
In 2021 it jumped to $1500, and if she chooses to renew this year, it will be nearly $4,000.
“I couldn’t believe it,” Guzman said. “I mean I had to re-read the letter. I thought they had made a mistake,” Guzman said.
It was no mistake and the letter that came along with the statement confirmed it.
“Many of our customers have received or will receive substantial premium increases with their latest renewal offer,” according to the letter.
“We’ve seen increases throughout the years, but never this much,” Guzman said.
That was before Hurricane Ian and she wonders now what the increase will be.
Paul Handerhan is with the Federal Association for Insurance Reform, a non-profit, non-partisan group, whose mission is to provide affordable property insurance across the country.
News 6 asked Handerhan if rates will go down.
“So, it’s an interesting question,” he said.
“We’re already hearing from the private reinsurance market that they’re going to increase their rates to the primary insurers 20 to 30% this year, which means that gets passed on to consumers,” Handerhan said.
Reinsurance is basically insurance for insurance companies. They’re required by statute to carry a certain amount of reinsurance or cash equivalent to guarantee they can pay their claims after catastrophic events like hurricanes.
“So whatever you paid last year, you’re going to pay more this year, because the price of reinsurance is going up,” Handerhan said.
During the last special session in May, the state put up $2 billion in taxpayer money as a layer of reinsurance for private insurers.
Consumers did not see rates go down, but experts say rates didn’t increase as much as they would have.
“There could be a scenario where the legislature comes in and provides a robust reinsurance package,” Handerhan said. “Because the amount of reinsurance that they’re going to have to provide is dramatically much larger than the amount that they provided [during the last session].”
Many believe the state providing reinsurance for insurers is the quickest way to stabilize the market, so prices don’t continue to rise immediately.
The measures that were put in place during the last special session still need time to take effect, Handerhan said.
News 6 will continue to follow the insurance crisis.
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