Florida Homeowners- How to Get Your Insurance Bill Down!

Florida's homeowner insurance is the number one thing blowing up my clients' deals right now. Doubled, tripled, people walking away from houses they love. So, when my buddy Bruce Woodburn told me that he had booked the actual Florida insurance commissioner on his radio show, I said, bro, put me on the chair. I came with the questions that you probably would want to get him in the room and ask him. I'm going to give you the good, the bad, and the ugly, what caused this, what finally is working, and three specific things that you can do to cut your bill this year. One of them actually saved me six grand on my own house. Stick around, because the third one is free money most homeowners never claim. I'm Tom McNamara. This is the Florida Real Estate Insider. Grab a coffee. Let's go. He is the Florida Insurance Commissioner, and he has been gracious enough to join us on the Lone Ranger radio show today. Well, you know, we've done this amazing thing where we've built, we put $10 trillion of property value and 23 million people on a narrow peninsula that is surrounded by two bodies of water that like to throw storms our way. So we've got we've got a tremendous risk profile in the state of Florida. And then on top of that, in the years beginning in 2015, 2016, we saw a cottage industry of explosive litigation that compounded those natural problems that that always made insurance a bit more expensive than everywhere else in the country that caused it to skyrocket and go out of control. So it really was litigation and other social inflation. Quick context on the room. This went down on Bruce Woodburn's radio show, The Lone Ranger. Bruce handles the mortgage side. I handle the real estate side. And the man in the middle is Michael Jaworski, Florida's insurance commissioner. The guy who actually runs this whole system. So, I didn't waste my seat. Florida represents a small percentage of the nation's homeowner insurance claims. But disproportionate amount or a large percentage of lawsuits, what's driving that imbalance? So pre-reform, it was our one-way attorney fee statute. And the exact number was, for example, in 2019, Florida accounted for 8% of all property claims in the United States, but 76% of all property claim litigation in the United States. So we were disproportionately out of control when it comes to our litigation, and it was incentive oriented. It was because we had a law in the books that was intended for the best of reasons. The consequences of it were that if you sued your insurer and you won, then the insurance company, which really means the people who have policies with that company, had to pay for all the legal fees associated with that claim. And so we saw abusive, bad-acting trial attorneys that were engaging in this space and litigating every single chance they could. But we did repeal the one way attorney fee statute in 2022. We repealed the AOB provisions a little bit before that, and we're seeing net benefit results to the policyholder. The reality is if we hadn't made those reforms, we would have the market probably would have collapsed. What's the biggest obstacle preventing premiums from coming down right now? Inflation is a major factor. We set rates at the state level. We don't set the premium. And so rate is how much it costs per brick of insurance to rebuild your home. And premium is the multiplication of those numbers of bricks. And if inflation is up, the cost of that brick went up, so the more insurance you're going to need for replacement costs. That's exactly right. And so labor costs, goods, all those things, we saw a tremendous explosion. Thank you. Average total insured value of our entire marketplace almost doubled between 2020 and 2024. A lot of it was inflationary pressure. Here's the part I tell every client. The state's MySafe Florida Home Program gives you a free wind mitigation inspection and a matching grant up to $10,000. Two state dollars for every one of yours to harden your roof, windows, and doors. If you qualify, get on the list before it runs dry. If you haven't had an 1802 mandatory mitigation credit inspection done on your home, you should absolutely do that. It requires insurers to give you discounts for certain features of your home. And so make sure that we add that to our website as well. Tell us again, that's the 1802? That's the 1802 Uniform Mitigation Credit Program. Not everyone has done it, and it can make a huge difference in the premium. That's the wind mitigation inspection, correct? Okay, that's our wind mitigation. So I did it on mine recently, and just looking at the numbers from the carrier, I want to say it dropped my bill like six grand. It was crazy. So, you know, roofs are the biggest frustration I face on a daily basis with buyers, sellers. Other than solar panels. Other than solar panels. Yeah, it's a whole different thing. And, you know, the big question, the big concern that people throw out there is why do I have to replace my roof at 15 years? Why is the insurance company able to force me to do this? Even if your roof is in good shape. Simple asphalt shingle roofs do not hold up against the Florida sun for longer than 10 years. They keep the water out after 10 years, but that adhesive sealant that is sealing them and keeping them down in a high wind event. is not holding up um now shingle you know i got a lot of trouble a couple years ago by big shingle um because i i said that it was time to to get rid of that right in the middle of Florida or something but shingle roofs are a problem in Florida for the reason you'll see however one thing to keep in mind is that Florida law uh does say that if you if your insurance company says they're not going to renew you for because of the roof You can have an inspection done on that roof, and if a licensed individual says that that roof has That's five more years. five years or more of life left, they can't not renew you for that reason. And so that's a new law that was added as part of the reform package in 2022. Almost nobody knows this one. Under a Florida 2022 law, your insurer cannot drop you just because your roof is old. If a licensed inspector certifies that it's got five or more years left of life, they have to keep covering you. I've watched that single fact save my clients from being forced to replace a $25,000 roof. Know your rights. People don't want to make a claim because they feel like you're either going to get canceled or their insurance premium is going to go through the roof if they make a claim. Can you shed a little light on that for us? Generally speaking, filing a claim, regardless of its disposition, is not going to raise your rates. And what I always tell and what a responsible insurer or an agent will tell, especially following a catastrophe, if you've had some damage, but you have a hurricane deductible, If you don't think it's going to meet that deductible, you should still file that claim. One of the things about the hurricane deductible specifically is that it's for the entire calendar year. So if we did have a second event and you had more damage during that calendar year that did cover the deductible, that all applies at that point. They're stacked in here. We always encourage people to file claims when they think they have damage to see if they're being paid for correctly. Getting a new insurance policy while you're in the middle of the claim. Tom, enlighten Mike with that. Mike, you know, a few years back, I had some roof damage, and it was legitimate, I think, roof damage. Several roofers told me it was. I submitted a claim. I was rejected, denied. I ended up suing them. Well, that took three years. And during that three years, my rate went from about $3,500 up to over $8,000. And I couldn't leave that company because I was in suit with them. Because if I'm suing a doctor for malpractice, I'm certainly not going back to that doctor. Why can't I leave my insurance company when I'm in the middle of litigation with them? Well, you can typically leave them. It's finding another company that will take you at that time that becomes difficult. Because you're in that active litigation, there's an assumption in place that you believe there's damage to your home. which makes it more difficult for them to underwrite. Citizens will take people in situations if they are non-renewed and they have an active claim that is taking place, so there is always that avenue that does come up. We have that provision in place for situations like that so that you don't not have insurance because you're involved in active litigation. It sounds like you had an experience where you believe there was bona fide damage to your home, the insurer fought back. These are the things we'd like to hear about so that we know If there's a problem in the claims handling process, the adjustment process, where they're not paying that claim properly. We've seen a lot of that. That's a national issue at this point. Once we see enough of anything beyond what appears like a blip or a one-off, we start to launch investigations and other things. And I guess to start that conversation with your department, you can give us the website and we'll put it on the podcast. So that people know where to go. So speaking of Citizens insurance. It grew dramatically in recent years, and I think you're making progress in moving homeowners back into the private sector right now. And why is that important? Great question. Citizens basically did what it's designed to do, which was we had this huge disruption within the marketplace, lack of affordability, availability. um capacity generally and it grew substantially it had 1.4 million policies so it had grown dramatically it had kind of taken on that risk we went through those difficult years so it's shrunk dramatically in the past years um i i think you know in all fairness i think we'll see some growth back in it as kind of the market settles a little bit we have a large residual market in florida but the the bottom line of why that's important is because citizens is special it's a state-owned property insurer that One more thing on citizens, the state-run insurer of last resort. It had ballooned to about 1.4 million policies back in 2023, but as private companies came back, the state has been moving people off of it fast. It is no longer the biggest insurer in Florida. The market is healing, and if you're stuck on citizens right now, that's exactly the moment to shop. A private offer within 20% of your citizen's price, and hey, they're going to require you to take it anyway. People need to realize that you do need to shop your insurance every other year, but you definitely need to shop it. I, and I even reshopped it with my own company and I got results from it. So just kind of closing things out here for homeowners listening to the show today. What's the single biggest misconception? about Florida homeowners insurance, and what do you wish everybody understood? Shop your policy. I had an experience myself where I was with an agent, and they called to renew my policy, and I said, well, have you shopped it around? And they said, no, but we can put you on a list for next year to look it up. Well, I switched agents. I want it now. Yeah, you know, that's not adequate to me. A rule of thumb for me is always if your agent is not shopping that policy once a year when they're calling you to renew. You need a better agent. The recognition that living in Florida, you know, a lot of things are cheaper in Florida. A lot of things, some things are more expensive in Florida. It's overall a fantastic place to live. So, you know, there is insurance is always going to be a bit more here. And it's going to be something that we need to build for. We're never going to be the cheapest place to insure. No, I don't. I think that's good advice. And I think people need to realize if you want to live here, And you're going to pay a little bit more for an insurance premium. Here's your action plan. Number one, shop your policy every single year. The commissioner does it. I do it. Don't let some agent tell you you don't need to. Number two, get your wind mitigation 1802 inspection. That's the one that saved me six grand. Number three, go to My Safe Florida Home for that free inspection and a grant for up to $10,000. If you're buying, selling, or moving to Florida and freaking out about the insurance, hey man, that's my whole job. Book a call with me, the link is down below. Need the loan side? Bruce is your guy. Hit subscribe so you're always informed and send this to the one person you know who is convinced. That insurance means they can never own in Florida because now we've got a plan. Hey, this has been the Florida Real Estate Insider. I'm still Tom McNamara. See you in the next one.