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THE INSURANCE CRISIS IS AT A DANGEROUS POINT
By
Eric Glazer, Esq.
Published July 17, 2023
While condo owners are now dealing with mandatory inspections,
mandatory repairs and mandatory reserve accounts, both condo and
HOA owners are facing the joint monumental problem of staggering
increases in property insurance and the lack of choice among
insurance companies. Our sponsor Greg Waltz sent me an article
recently that is simply mind blowing and frightening. I’m
sharing it with you.
The average premium for homeowners insurance in Florida hit
$6,000 per year for 2023, compared with just $1,700 for the
nation as a whole, according to the Insurance Information
Institute.
Florida premiums have soared by 42% in the last year alone, and
by 206% since 2018.
They’re the highest in the nation, by far.
And while home prices continue to soar, Florida home values are
only the 18th highest in the country, according to
Zillow,
so pricey real estate doesn’t explain the nation’s highest
homeowners insurance rates. The state, for sure, gets battered
by hurricanes and other types of extreme weather and that has an
impact. But that, surprisingly, isn’t the biggest problem,
either.
Instead, Category 5 fraud and abuse have made Florida’s
homeowners insurance market so unprofitable that
15 carriers have become insolvent in the state since 2020
— and others refuse
to do business there. “This is a man-made catastrophe,” says
Logan McFaddin, vice president of state government relations at
the American Property Casualty Insurance Association. “It’s not
just the weather. It’s frivolous litigation and fraud.”
The Florida Legislature passed a slate of insurance reforms in
2022 and this year. It used to be that if you sue your insurance
company, you get attorney’s fees if you win in court or even
settle the case. The insurance company was not entitled to
attorney’s fees, even if they won. No more. Now, neither party
gets attorney’s fees. This will no doubt result in far fewer
lawsuits being filed against insurance carriers who fail to
settle a claim to the satisfaction of the insured.
In addition, Florida’s statute of limitations on negligence
actions went from four years to two years. The insurance
industry praised the legislation as essential to luring carriers
back to the state and lowering costs for consumers. But the
effects of these laws will take time and premiums have gone even
higher and only hopefully and eventually they will start to
drift down.
Money is tight everywhere. Most Americans are living paycheck
to paycheck. A rise in insurance of two or three thousand
dollars a year can be the difference in being able to afford to
continue to live in your home. Yes, insurance will be a major
factor as to whether or not people get foreclosed upon and lose
their homestead property.
Was enough done by The Florida Legislature to bring insurance
companies back to Florida? Well, have you seen any insurance
companies come back yet? I haven’t.
Desperate times call for desperate measures. I heard this idea
touted before…….if a company wants to issue automobile policies
in this state it also has to issue property damage and windstorm
policies. Believe me Allstate and State Farm would not want to
lose the hundreds of thousands or millions of auto policies they
issue in Florida.
Of course the best idea would be to expand the National Flood
Insurance Program to also include hurricanes and tornadoes. The
problem is that this would require a vote of Congress and states
that don’t suffer the brunt of hurricanes and tornadoes would
simply not vote in favor.
Maybe the answer is requiring better construction or no longer
allowing development so close to the beach or coastline. I
don’t know. I only know that something has to be done because
insurance rates cannot continue on their current path.
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About
HOA & Condo Blog
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Eric Glazer graduated
from the University of Miami School of Law in 1992 after
receiving a B.A. from NYU. He has practiced community
association law for three decades and is the owner of
Glazer and Sachs, P.A. a five attorney law firm with
offices in Fort Lauderdale and Orlando.
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Eric is Board Certified by The Florida Bar in
Condominium and Planned Development Law.
Since 2009, Eric has been the host of Condo Craze
and HOAs, a weekly one hour radio show that airs at 11:00 a.m.
each Sunday on 850 WFTL.
See:
www.condocrazeandhoas.com.
Eric is the first attorney in the State of
Florida that designed a course that certifies condominium and
HOA residents as eligible to serve on a Board of Directors and
has now certified more than 20,000 Floridians all across the
state. He is certified as a Circuit Court Mediator by The
Florida Supreme Court and has mediated dozens of disputes
between associations and unit owners. Eric also devotes
significant time to advancing legislation in the best interest
of Florida community association members.
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