JACKSONVILLE, Fla. – If you received a notice from your home insurance company that your policy isn’t being renewed, you are not alone.
Thousands of families are in the same boat following dramatic financial losses in the insurance industry across the state.
Insurance experts say insurance claims related to the past four to five hurricane seasons share part of the blame, along with what’s called an attorney fee multiplier, which enables lawyers to charge insurance companies higher fees.
An owner of a Mandarin home, who did not wish to be identified, recently received a letter from his insurance company, St. Johns. He and his family do not live in a flood zone, nor have they filed any insurance claims. Still, they were just notified their insurance policy is not being renewed.
“It’s very disturbing for homeowners,” said We Insure Agency Owner Sean Way.
Way says hurricane damage, and an avalanche of insurance claims, are the reasons customers by the thousands are being dropped.
“The statutes on that allow homeowners to file claims three to five years back, and that’s one issue there. However, when a homeowner gets an attorney involved, they have these fee multipliers, which really hurt. You take a $10,000 claim, you take an attorney who charges normally $500 an hour, and now they get to multiply that times 2 ½ percent, and the insurance company ends up having to cover all of that cost. That passes along to the homeowner,” Way said.
Other reasons insurance companies are dropping their customers include living in a ZIP code with a high number of claims and houses with older roofs. Aging plumbing or electrical systems can also lead to insurance companies not renewing policies.
Way says homeowners signing an assignment of benefits, which gives third party authority to file a claim without the involvement of the homeowner, is another factor.
“A lot of times, you take a plumbing job that could cost $10,000, and now it’s blown up to $50-60,000. You’ve got attorney costs in there,” Way said.
According to the Insurance Journal, nearly 60 Florida insurance carriers suffered a combined $701 million in losses in 2019.
So what should you do if you get a non-renewal notice? Talk to your insurance agent about finding another carrier, which may cost you more money.