Ensuring your biggest investment is properly protected can cost you more.
According to the Insurance Information Institute, home insurance premiums in Florida are expected to jump, on average, by more than 25% this year.
“We’ve had this ongoing problem of fraudulent roofing claims,” said Mark Friedlander of the Insurance Information Institute.
Friedlander said those claims are a big reason many homeowners have seen increases in recent years. But now, another factor could also have a big impact: rising replacement costs.
“It came as a shock to many landlords across Florida because they didn’t know why their policy is changing and why it’s so different,” Friedlander said. “Why do I have so much more coverage now?”
Friedlander explained that rising labor and lumber costs, fueled by supply chain disruptions and inflation, mean it will cost more to replace your home. catastrophic loss in a hurricane or fire.
“Many landlords receive a renewal bill from their insurer that has changed the level of coverage for their home,” Friedlander said. “If you change the level of coverage in your home and it’s increased by $75,000 in the last year, you’re going to pay more for your insurance.”
And it’s not just your level of coverage that’s likely to be higher.
“Hurricanes are a deductible percentage of the home coverage amount,” said Dulce Suarez-Resnick, insurance agent with Acentria Insurance. “So if you were insured for 500,000 and now it’s 600,000 and you had a hurricane deductible of 2%, which means you had a hurricane deductible of $10,000, you now have a hurricane deductible of 12 $000.”
Suarez-Resnick said many of her clients have to make tough decisions about what to do with their policies.
“Be proactive,” she said. “Call your agent, have a tough conversation about what changes we can make to our policy to make it more affordable.”
The price you pay for car insurance should also increase. Friedlander said he could jump 3-8% this year.
“When we look at the car insurance market, there are many similar factors,” he said. “Disruption of the supply chain, the cost of parts is more expensive, the cost of labor to repair vehicles is more expensive, the cost of vehicles is more expensive.”
Another important factor is the frequency and severity of accidents. Friedlander said there were more crashes in 2021 and they were more serious, so that’s a big reason many premiums are likely to rise this year.
Friedlander said if your car’s premium increases at renewal, you might want to shop around. You can also ask your agent about discounts that may be available under a number of circumstances, including: a good credit history, bundling your owners and car coverage with the same insurer, student drivers with good grades in high school or college, students living away from school without a vehicle and low annual mileage.
You may be able to save on your home insurance policy if you also insure your car with the same company, increase your deductibles, or have a monitored fire or burglar alarm.
But Suarez-Resnick said if you decide to increase your deductible, make sure you can afford to pay it if you end up needing to use your coverage.