Florida stews under costliest U.S. insurance despite 10-yr. storm lull

Hurricanes may have swerved away since 2005, but Florida’s homeowners still are taking direct hits on the wallet.

Floridians pay the nation’s most expensive home insurance premiums, averaging $2,115, up from $2,084 a year earlier, statistics released Wednesday show.

“The annual premium increases are not justified,” said Nicole Vinson, a Tampa attorney who sues insurers and heads a group called Policyholders of Florida. “In addition to paying more, policyholders are receiving less coverage than our neighboring states, even those on coastlines.”

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Insurers and their allies say abuses by attorneys, contractors and others to inflate claims such as plumbing leaks — a hot topic in legislative debate Wednesday — are one way rates can go up even when hurricanes go away. That’s the case officials at state-run Citizens Property Insurance Corp. make about rates it raised this year in South Florida, including Palm Beach County.

“This is a growing problem,” Lt. Gov. Carlos Lopez-Cantera told a state Senate panel that amended a bill, SB 1242, to try to limit alleged abuses Wednesday. “There’s significant evidence this is leading to higher premiums.”

Attorneys and contractors weave a different tale, but there is not much debate about where Florida stands compared to the rest of the nation when it comes to the cost of home insurance.

The Sunshine State led Texas ($1,837) and Louisiana ($1,822) for the most expensive average premium for standard homeowner policies, according to the National Association of Insurance Commissioners.

Florida’s bills run close to twice the national average of $1,096.

The data is the latest available from the regulator group, based on 2013 premiums. The state average of more than $2,000 a year would look like a bargain to many in South Florida, who often pay much more.

“Florida has the highest property insurance rates because it has the nation’s highest insured catastrophe losses — and that remains true despite 10 storm-free years,” said Lynne McChristian, Florida representative for the industry-funded Insurance Information Institute. From 1985 to 2014, Florida had $68 billion in insured catastrophe losses, adjusted for inflation, she said.

Even when hurricanes take a holiday, industry groups say a big part of the problem is abuse by third parties who gain control of insurance benefits. A contractor who shows up to to deal with a broken pipe, for example, may ask a harried homeowner to sign an “assignment of benefits” agreement.

Efforts to restrict such agreements have not fared well in the courts or legislature the last few years, though a renewed bid is underway before this year’s scheduled session ends March 11. A bill that cleared the Senate’s appropriations subcommittee on general government Wednesday has become the latest vehicle for attempted reforms, such as a ban on contractor referral fees more than $25.

The Property Casualty Insurers Association of America warned attorneys and “shoddy vendors” can strip homeowners of control over their own policies, sometimes leading to unnecessary litigation. Reforms remain one of the group’s “top priorities,” said Logan McFaddin, PCI’s state governmental relations manager.

Attorney Vinson questions any “crisis” on water claims, saying what’s real is that Floridians are paying more for less coverage.

“Sadly, I have to advise my clients not to be surprised premiums increase but the coverage is less than it was last year,” Vinson said. “Floridians should pay close attention because the coverage for residential claims is being sliced and diced but the price tag is going up.”

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