Home Insurance Rates in Florida Have Gone Parabollic

[Jason L.]

I got renewal quotes on 2 of my investment properties in Tampa this week. Last year I paid $1475 in premiums for the 2 houses combined, but the quotes this year came in at about $2200. That's about a 40% YoY increase! In a non-hurricane year!

Do any other Florida investors have recent insurance hike horror stories? Any recommendations on other providers or is just universal across the board?

[Dan Maciejewski]

Yes.  This is a big issue and legislators are looking at the causes.  AOB (Assignment of Benefits) is a huge issue.  I wrote a blog about it a few months ago.  Shady contractors are getting the AOB and then suing the insurance companies for payouts (usually roofs but you are currently seeing the Morgan and Morgan commercials about the plumbing now) for things that probably shouldn't have been covered.

That drives costs up.

I just read an article that around 40% of your payment is to cover litigation costs.  And when the cost to defend or pay out litigation goes up, so do the rates.

Take a look at why Doctors cost so much -- medical malpractice insurance is crazy -- Surgeons pay between $30,000 and $50,000 a year.