As the 2022 mid-term election approaches, the media, especially television, in South Florida are consumed with political ads. But sadly, these ads offer relatively little on the policies these candidates, at all levels, plan to implement in the region. Frankly, on hearing these ads some voters cannot be faulted for questioning why they should vote.
While some candidates focus on issues like abortion, funding the police, crime, and education, very few have focused on, or even mention the core problem affecting South Floridians – residential security, meaning the ability to secure affordable housing.
Once, not long ago, Florida, especially South Florida, was one of the more affordable states in which to reside and raise a family, but it now ranks with New York and California as the most expensive state to reside.
Since the advent of the covid epidemic in 2020, more people have migrated from other states to Florida, increasing the cost of residential rentals, and mortgages. But the major factor contributing to the escalated costs to homeowners is the cost of property insurance.
Florida has the unfortunate reputation of having the most expensive property insurance in the US. According to the Insurance Information Institute, average annual premium for a three-bedroom dwelling house in Florida was $4, 232 as of July 2022, compared to $1,544 nationally. However, the average hovers around $5,000 for the same sized house in South Florida.
Not only is property insurance exceptionally high in Florida, but the state’s property insurance market is the worst in the country. Simply put, the market is one hell of a mess.
A series of storms, hurricanes, nefarious claims, and fraud have chased property insurance companies from Florida. It’s not unusual for homeowners to receive unexpected notices, that their insurance company is either closing, leaving the state, or won’t be renewing policies.
To afford the premiums offered by the few existing property insurance companies remaining in the state, homeowners are spending large sums to install storm-resistance doors and windows. But there are no real storm resistance roofs as yet. Some companies charge extra premiums for older roofs; roofs constructed for what is perceived as storm-vulnerable materials, and some won’t even insure roofs, if they are regarded as too old.
In addition, most insurance companies have increased their deductibles, meaning homeowners must spend more from their own sources before insurance companies honor the claim.
Many homeowners, trying to reduce insurance costs have taken the risk of dropping coverage for flood coverage. Currently, most insurance companies sell coverage for floods separately from general homeowners’ policies. So, when flooding occurs, and homes are flooded, as was recently experienced in Southwestern Florida, homeowners are left with huge losses.
As private insurance companies flee, or stop doing business in, Florida some homeowners have no alternative but to turn to the state-owned Citizens Property Insurance Corp.
Covering approximately 500,000 property owners two years ago, Citizens’ coverage now extends close to two million homeowners. With few private insurance companies operating in the state, it’s anticipated the demand for coverage by Citizens will grow. But there’s increasing concern Citizens will soon outgrow the administrative capabilities to manage all these policies.
One of the advantages of insuring with Citizens is that its premiums are generally lower than those charged by private companies. State law restricts Citizens from increasing premium rates by more than 11 percent in a year. Moreover, increases in rates must be approved by the Florida Office of Insurance Regulation.
At face-value, insuring with Citizens seem like the answer, but there’s also concern if another bad hurricane hits regions like South Florida with Citizens covering so many homeowners, it will be unable to meet the demand for massive claims.
All these problems are familiar to Florida officials, but to date there has been a failure by the Florida Legislature to help homeowners. An anticipated special session of the Legislature called last May, provided assistance for the insurance companies, not for homeowners.
High property insurance not only affects homeowners but is passed on to renters. When owners of rental properties confront increased premiums, the increase is passed on to tenants. There is no sign of any potential decline in property insurance. This will make it less affordable for Floridians, especially homeowners of senior years, and renters, to live. Already high mortgages, property insurance, property tax, and rent, are making living in Florida unbearable.
But who among the many candidates seeking political office to represent Floridians is willing to address this critical issue? Floridians desperately need help with their residential security. The candidate who postulates a meaningful plan to cope with this issue deserves Floridians votes. Will that candidate please step forward!
