Originally posted by @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?
Last year, I filed a water damage claim on one of my rental properties and it ended up being a huge mistake and a costly one at that. After filing the claim, I purchased another rental property in Jacksonville (financed). The initial quote that I received was a little over $500 for the year. When I went to get the policy bound, the agent advised me that the insurance company refused to write the policy. As a result, I had to go with a surplus carrier that was almost four times as much.
In February this year, I purchased another rental in Miami (all cash)... I didn't want to take the risk of self-insuring though. Before closing, I called my insurance broker for a quote figuring that I would just have to get a policy with another surplus carrier. Unfortunately I found out that I am now completely uninsurable and there are no carriers that will write me a policy at all. I tried shopping around with multiple brokers and ended up with the same problem. I couldn't even get a policy through any of my LLC's. I was told that they run what's called a CLUE Report (Comprehensive Loss Underwriting Exchange) which is basically a history of all your previous insurance claims to determine insurability. Long story short, I had to close on the home in my son's name so he could get the policy.
My broker told me that I will now have to wait for another 3-5 years depending on the carrier before the claim is not held against me and I can once again get a homeowners policy. In the meantime, I am taking a loss due to lost opportunity cost since I can't purchase anymore rental properties using leverage.
Since I can't purchase rentals using leverage now, I have turned to syndication investing. So aside from the astronomical rate increases across the board, I learned that you get screwed anytime you file a legitimate claim. The only time I will file a claim in the future I guess is for a catastrophic loss... These insurance companies will take your premiums for years but when you file a claim, you suffer the consequences. I agree 100% with what some of the others have posted that our insurance system in Florida is completely broken!
