The Florida homeowners insurance market remains challenging. And understanding all of the nuances of a complex and fluid market can make things confusing. Pineapple Insurance is here to help break things down for you.

Another Homeowners Insurance Company in Receivership

Seven homeowner insurance companies were taken into receivership by the State of Florida – the most recent being United Property and Casualty in March of 2023. Another company has announced that they will withdraw from the Florida homeowners market and will non-renew their existing policies during CY 2023 and 2024.

Those non-renewals were effective in April 2023. Multiple carriers have restricted new business capacity, initiated non-renewals, and have taken some rather substantial rate increases to combat rising costs, principally related to litigation and inflation (labor and materials).

Hurricane Ian Deals a Blow to Florida Insurance

Florida experienced multiple storms and ended the year with one of the costliest and personally devasting natural disasters in Florida’s history. Citizens, the state-run insurer of last resort, has Policies in Force (PIF) of 1,239,396 as of March 31, 2023. Citizens is on pace in 2023 to exceed its PIF highpoint of 1,482,707, which was in November 2011.

Initial 2022 FL Statutory Industry results appear to indicate a combined ratio of 114%, which simply means the industry lost 14 cents for every dollar of premium written. These results will continue to develop as more carriers complete their financial reporting.

Florida Legislature Address Homeowners Insurance

To combat these challenges, the Florida Legislature held a special session in December to provide meaningful reform, which the governor signed into law.

The purpose of the reforms is to:

1. Stabilize the personal homeowners insurance market by allowing carriers to estimate their future costs better.

2. Reduce frivolous lawsuits and unnecessary litigation, thereby reducing costs for insurance companies and, ultimately, the consumer.

What the Future Holds for Florida Homeowners Insurance

Unfortunately, rates are expected to continue to increase due to the cost of reinsurance, which many carriers, including Citizens, are in the negotiation process of as we speak.

While these reforms should bring about market stabilization, the next 12 to 24 months will continue to be challenging as carriers implement these changes and attorneys test the reforms. The Florida Personal Lines property insurance market has faced similar challenges and has always found solutions.

Lastly, while insurance can be considered an expense, we encourage you to also think about it as the peace of mind that it can provide to help you and your family recover in the event of a loss. We strongly recommend that each of you have a flood policy, even if your home is in an X Zone, which, while not required by your mortgage company, does not mean it is unnecessary.

Pineapple Insurance is Here to Help

If you have any questions, if we can be of assistance, or if we can review your existing coverages for your home, flood, auto, or umbrella policies, please call 813-438-7240 or visit pineappleinsure.com for important reference information or to request a quote or contact.

Stay safe.

Storm risk is just one of many reasons insurance policies are canceled. For starters, insurance companies cancel policies because of late payments, pets, old roofs, and trees in the wrong place.

Worried that your homeowner’s insurance could be canceled one day? Well, you won’t be able to blame it on the hurricanes in 2022.

Why Insurance Companies Cancel Policies

There are many reasons why your insurance company might cancel your policy, such as not paying your premiums, the risk of wildfires in your area, not taking care of your home, or making too many claims. But there are also some unusual reasons, like certain dog breeds, snakes, electric vehicle hookups, and solar panels.

While an insurance company can’t typically cancel a single policy because of more storm damage, it could end up writing policies in a high-risk area like Miami-Dade County. Or it could stop writing policies altogether, as many have seen in Florida over the past year.

1. Water, Water Everywhere

Water damage is the most common type of loss, not just in Florida but everywhere. Anything to stop water damage then is critical. Steel braided hoses should be used for anything that has to do with water, like the fridge or the toilet. Insurance companies don’t want to see rubber hoses or water heaters that lack an overflow tank. Water heaters usually last about 10 years.

A high-tech water leak system can shut off the water when it detects unusual water patterns. This would reduce the chance of water leak damage. The device connects to the water supply mainline and links to a phone app. This technology can quickly tell you why water is running in a given area of your home at any given time. An alert for unusual water usage may be sent, and if there’s no response, the water will be turned off. This system can also find a leak in the toilet. This kind of technology is mainly meant to help you avoid having a loss in the first place, and you may get a discount on your policy.

2. In The Dog House

Your pets are just one of the strange things that can cause your policy to be canceled. If your dog hurts someone or causes damage to their property, your liability coverage on your home insurance policy should cover it. That is, unless your dog is a “restricted dog breed,” like a pit bull, Rottweiler, or Doberman, which has been banned in Miami-Dade County for over 30 years.

Breeds on the restricted lists vary by company and state. The Akita, the American pit bull terrier and pit bull, the Chow Chow, the German Shepherd, the Great Dane, the Rottweiler, the Siberian Husky, and the Wolf hybrid are all standard breeds that are likely to cause an insurance rate increase or cancellation. Several insurance companies do not have rules about what kind of dog you can have. You can do a simple DNA test if you’re unsure what breed your dog is. The amount of each breed could also be a factor.

3. Exotic Pet Problems

Many insurance companies won’t cover snakes like boa constrictors, venomous snakes (which are illegal in Florida), or even ferrets because they see them as a risk. Some insurance companies don’t cover people who own reptiles because they think it’s too risky.

Tell your insurance company if you have an exotic pet or a dangerous dog. Even if someone gets bitten once, your policy might not be canceled. However, if you never told the insurance company that you owned the dog, you would be responsible for all medical bills.

4. The Sun Is Setting on Solar Panels

A recent story from First Coast News in northern Florida said that some insurance companies are dropping Florida residents who want to put solar panels on their homes, and some are just dropping customers who already have solar panels.

According to that report, an insurance agent in St. Augustine said it might happen because of a clause in some contracts with Florida Power and Light that says, “you as a homeowner are responsible for paying for all of the damage caused by the panels.” One example is if a power surge from the panels hurts the grid or other homes.

The report also stated that home insurance companies deny coverage if the homeowner wants to sell the extra power their solar panels make back to the electric company. Net metering is the system’s name, and it is a common way for a homeowner with solar panels to use it.

5. Electric Cars Could Be Off The Grid

An article in The Balance stated that putting a charging station for your car in your garage or driveway could affect your home insurance. Some state laws require homeowners to have liability coverage for the charging equipment. The report said that some underwriters might want to see photos or documents showing the unit was installed correctly.

Before adding a charging station to your home, discuss any requirements with your home insurance agent. It would be best if you also got more comprehensive car insurance. Most of the time, hard-wired charging stations are considered part of your home. Depending on the type and cause of loss, the station will likely be covered. If the charger catches fire because of a problem with the home’s wiring, the homeowner’s insurance will likely cover the fire.

Pineapple Insurance is Here to Help

When you’re unsure about what’s covered by homeowners insurance, Pineapple Insurance is happy to answer any questions about what a policy covers. Contact us at 813-438-7240 or visit us at pineappleinsure.com, and we can review existing coverages for your home, flood, auto, or umbrella policies.

Florida’s homeowners insurance can be difficult to understand and navigate. But it doesn’t have to be! Pineapple Insurance, under Tomlin St Cyr’s suite of services, is here to help!

If you have any questions or if we can review your existing coverages for your home, flood, auto, or umbrella policies, please contact us at 813-438-7240 or visit us at pineappleinsure.com for important reference information or to request a quote or contact.

Florida’s Homeowners Insurance Market Remains Challenging

In 2022 alone, we had:

• Six homeowners insurance companies were taken into receivership by the State of Florida.
• Two companies have announced that they will withdraw from the Florida homeowners market. They will non-renew their existing policies during CY 2023 and 2024.
• Multiple carriers have restricted new business capacity and initiated non-renewals. They also have taken some rather large rate increases to combat rising costs, principally related to litigation and inflation (labor and materials.)

We experienced multiple storms and ended the year with Hurricane Ian, one of the costliest and personally devasting natural disasters in Florida’s history.

Property Insurance Changes

To combat these challenges, the Florida Legislature held a special session in December.  Governor Ron DeSantis signed into law meaningful reform. The purpose of the reforms is to:

• Stabilize the personal homeowners insurance market by allowing carriers to better estimate their future costs
• Reduce frivolous and unnecessary litigation, reducing costs for insurance companies and ultimately the consumer

While we believe these reforms will bring about market stabilization, the next 12-24 months will continue to be challenging as carriers implement these changes and attorneys test the reforms. The Florida Personal Lines property insurance market has faced similar challenges in the past and has always found solutions.

What To Keep Your Eye On

The specific areas of reform are as follows:

• Attorney fees – eliminating one-way attorney fees
• Assignment of Benefits (AOB) – eliminates a policyholder’s ability to execute an AOB for all property insurance policies (but maintains an existing carve-out for seller-to-buyer AOB related to an ongoing insurance claim.)
• Bad Faith – requires a breach of contract before a policyholder can sue a property insurer for settlement-related bad faith; acceptance of an offer of judgment or the payment of an appraisal award, alone, is not sufficient to support a lawsuit.
• Offer of Judgment – makes attorney fees available for the prevailing party in offers of judgment (proposals for settlement) in property insurance cases. It allows joint offers of judgment to be contingent on the acceptance of all joint offerees.
• Florida Optional Reinsurance Assistance Program (FORA program) – creates a program that provides optional hurricane reinsurance that property insurers can purchase at near-market rates. The FORA program is funded with $1 billion in general revenue for the 2023 year and is supplemented by the premium insurers pay for coverage.
• Notice of Claim – reduces the time limit for providing notice of a loss to a property insurer from two years to one year for initial or reopened claims and from three years to 18 months for supplemental claims.
• Claims Investigation and Prompt Payments – changes the prompt pay statute to encourage property insurers to settle claims in a timely manner. This requires the Office of Insurance Regulation (OIR) to collect certain additional data.
• Mandatory Binding Arbitration – codifies that companies, for a premium discount, may issue an optional endorsement with consent from the policyholder that requires participation in binding arbitration to settle a claim.
• Notice to Policyholders – requires that a property insurer place the “Flood Coverage Not Included” statement on the policy declarations page rather than just “with the policy documents.”
• Office of Insurance Regulation (OIR) – enhances OIR’s ability to do market conduct examinations of property insurers after a hurricane. This includes examinations of managing general agents. It allows OIR to discipline insurers for abuse of the appraisal process. This adds information regarding the use of appraisal to the list of information that a property insurer must include in its quarterly reports to OIR. It also allows OIR to review property insurers’ forms, withdraw approval, and suspend an insurer’s ability to invoke appraisal for up to two years. And this requires OIR to add the names of insurers who abuse the appraisal process to its Property Insurer Stability Unit biannual report and post those names to its website; at OIR’s option, allows additional time for agents to place policyholders during insolvencies.
• Citizens Property Insurance Corporation (Citizens) – for renewals and take-out offers (depopulation), establishes that if a renewal or take-out offer from an authorized insurer is within 20 percent of a policyholder’s Citizens premium, including surcharges and assessments being levied, a policyholder is in ineligible to remain in Citizens. For new policies, this establishes that the risk is ineligible for Citizens coverage if the admitted-market policy is within 20 percent of a policyholder’s Citizens premium. This requires Citizens residential lines policyholders to obtain flood insurance as a condition of having coverage from Citizens by 2027. It provides a different glide path for the rates that Citizens charges non-primary residents so that those policies become actuarially sound more quickly. This authorizes Citizens to combine its three policyholder accounts into a single account upon eliminating all outstanding financing obligations to allow Citizens to use its entire surplus to pay claims.