Florida Home Insurance Companies Increasing Home Inspections

As financial losses mount for insurance companies in Florida, many insurers are ordering more home inspections at both the beginning of a policy as well as at renewal time. Insurers are hoping to force homeowners to fix problems that may turn into a claim or to justify dumping homeowners whose property they consider risky. 

This is leading to significant rate increases for homeowners in Florida. Claims from 2017’s Hurricane Irma have hit $17.4 billion which is much higher than the $9 billion that was originally estimated. Irma was quickly followed by Hurricane Michael in 2018 which ended up costing insurance companies $7.4 billion. In addition, AOB lawsuits are still impacting South Florida, pushing up the cost of insurance even further.

Due to all of these claims, companies that sell reinsurance which is the insurance that insurance companies are required to purchase to ensure they can cover their claims after a major catastrophe have raised their rates from 20 to 30 percent, and those new costs have to be passed on to homeowners. 

The skyrocketing cost of reinsurance has led numerous insurance companies to refuse to write new policies or renew existing policies in certain Zip codes. In some cases, entire counties are finding it hard to find insurers to write policies due to years of losses because of claims. 

As an example, Deerfield Beach-based People’s Trust Insurance Co., has notified agents that it will temporary stop writing new policies across the entire state until the revenue from recent rate increases catches up with their cost for reinsurance and claims. Some companies are being more selective, refusing to write policies for homes over a certain age or houses that have roofs that are older than 10 years. Others are ruling out policies for homes with plumbing issues or even if the owner has filed a claim for non-weather-related water damage. 

Even if the homeowner manages to find an insurer willing to write a policy, they are most likely facing a property inspection that could end with them not getting a policy if the inspection turns up any issues. 

“Across the state, carriers are being more diligent about the types of risks they will insure,” said Paul Handerhan, president of the Federal Association for Insurance Reform, a consumer-focused watchdog group based in Fort Lauderdale in a recent Sun Sentinel article. 

Security First Insurance Co., which is an insurer, based in Ormond Beach, has started requiring inspections for all new policies and has increased required inspections for policies up for renewal. “It’s important now more than ever to evaluate risks upon renewal,” said Kerrie Ruland, the company’s vice president of business development in the Sun Sentinel article. “Where companies used to go three or four years without requesting inspections, now they seek them more often.”

Florida state law gives insurers 90 days after a policy is signed to verify the information on the policy application is correct as well as determine their risk. During the first 90 days of a policy the insurer can cancel the policy for any reason. 

In most cases, an insurer will do an initial inspection via satellite photos of the property or sending an inspector out to the property. They may also ask the customer to take a tour of their home with their cellphone taking photos. 

“We’ll ask them to take pictures of the [manufacturing] date stickers on their water heaters. We’ll have them take pictures of the outside of their houses showing the front and left corner and then the rear and right corner.” Ruland said in the article.

Insurers have also started requesting photos of the roof to verify the type of roof as well as its condition. Customers may be asked to send photos of plumbing connections as well as ceilings to make sure there are no water leak stains. Non-weather-related water damage has become a major issue in the world of Florida homeowner insurance. 

Under state law, if an insurance company does not do an inspection within the first 90 days of the policy, they are not allowed to cancel the policy just because of an unacceptable risk they find during the inspection. 

Once the 90-day deadline has passed, an insurer can cancel a policy for only one of three reasons:

• The customer misrepresented facts on the application.
• The customer failed to meet the guidelines established in the first 90 days. This can include not making repairs that were highlighted during the inspection.
• A substantial change to the risk occurs

While an insurer cannot legally cancel the policy after the 90 days go by, there is nothing stopping them from not renewing a policy once the yearlong term has expired. If this happens and a homeowner is unable to find coverage with another insurance company, they may be forced to look at coverage with Florida’s insurer of last resort, Citizens Property. 

These policies tend to offer less comprehensive coverage along with coverage caps and higher prices. Unfortunately, for many homeowners in the Sunshine State, it may soon be their own option. 

If you need help with your insurance or you are looking to easily compare quotes for your home in Florida, please click here to easily compare multiple Florida homeowners insurance rates or give us a call at 888-685-4704. We look forward to helping you shop and review the best rate quotes.