It’s been more than a decade since Hurricane Wilma came through South Florida, causing billions in damages.
So why do flood insurance rates keep rising even though Florida hasn’t been hit by a hurricane since 2005.
Even though the state has been spared from additional hurricanes since that time, we have been hit by flooding causing Florida’s property insurance market to pass on steady rising insurance rates to homeowners.
As Florida buckles down for the 2016 hurricane season, insurance prices are starting to go up, and at least one insurance official says the increases are due to the perfect storm of issues.
“Right now the trend had been we haven’t had storms in years but some of those policies are increasing and that is due to a lot of other factors. Not just hurricane damage but claims in general on the combined policies we call them. Those companies are taking rate increases all the time due to other claims,” said Robert Norberg Arden Insurance.
Flood insurance rates increased 9 percent on average for policyholders nationwide in April as the National Flood Insurance Program continues to dig itself out of $24 billion in debt incurred in the wake of hurricanes Katrina and Sandy and other recent emergencies.
“They are trying to recover from previous losses and the flood program has always been running a deficit. Florida unfortunately has the most flood policies of any other state,” said Norberg.
There is concern as Florida braces for what is expected to be a more active season compared to recent years. Despite the risks, experts say many Floridians go without coverage. If a building isn’t in a flood zone, insurance isn’t required by most mortgage lenders. Some people have dropped their coverage citing the high price.
“A lot of the population is very lackadaisical about getting flood insurance or their homeowners or wind insurance,” said Norberg. “A lot of people that have their mortgages paid off don’t think they need. We have a serious of ten years without any major hits to Florida so they are saying ok I will roll the dice.”
Insurance professionals say consumers should get an insurance check as hurricane season kicks off, to make sure policies are up to date, and coverage is sufficient. Ten years with no major storms, has the industry on edge.
