NEW ORLEANS (WVUE) – While Floridians are recovering from Hurricanes Milton and Helen, they are also struggling with rising insurance premiums.
“The average cost of home insurance in Florida is over $11,000 a year,” said Chris Schaefer, senior editor at Insurify, which specializes in home insurance.
Florida, like Louisiana, is facing an insurance crisis.
“To put it in perspective, the average annual income in Louisiana is about $6,500, the second highest. So when you talk about home insurance prices, there’s really no one in the ballpark in Florida.” Schaefer added.
Asked whether insurance companies have done enough to respond to the flurry of hurricanes, including deploying drone technology and hiring more staff, Schaefer was skeptical.
“I think all of those things have helped, but I can’t say they’ve caught up. What’s really interesting is that no one has a good solution to this. It’s not just the hurricanes in Louisiana and Florida. “We’ve been dealing with wildfires in California, and we’ve seen State Farm circumvent a lot of policies and pull out of the state,” he explained.
Veteran insurance agent Dan Burkhardt believes the recent hurricanes along the Gulf Coast will impact both the insurance crisis and premiums.
“It’s going to go up. All of our efforts to lower rates are up to Mother Nature. Regulations can be changed, but rates are ultimately influenced by the strength of the hurricane and the damage it causes. The reinsurance market will definitely take a hit, so interest rates will rise,” Burkhardt said.
Schaefer also expects the recent storms to worsen the insurance crisis.
“I think it could definitely make things worse. We’ve already seen some small state-based insurance companies in Florida go bankrupt because they can’t afford to do business. “Even large domestic insurance companies face significant risks,” he said.
Burkhardt is watching closely to see how insurance companies with policies in both Florida and Louisiana react in the aftermath of the Milton and Herren cases.
“We are monitoring our affiliates doing business in Florida. We are comfortable right now, but we don’t know what the number of claims will ultimately be. Hopefully, they are solvent and We have enough reinsurance. That’s the key,” Burkhardt pointed out.
Schaefer believes insurance companies are doing the best they can to deal with the damage caused by two major hurricanes in quick succession.
“I think they’re doing the best they can. It’s an interesting situation. Helen was hit hard, but Milton wasn’t as bad as people feared,” he said.
Schaefer also noted that more homeowners in Florida and Louisiana are turning to state insurance companies as a last resort.
“In Florida, Citizens is the number one property and casualty insurance company in the state, but that was never supposed to happen. Florida, and soon Louisiana, are trying to get people back into the private market. is happening. The Citizens plan was never designed to handle this many policies,” Schaefer said.
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