Property insurance in Florida has risen so much that homeowners went out to protest
This week, hundreds of homeowners in the Century Village community of Pembroke Pines, Florida, gathered together for a protest rally. They oppose an increase in their monthly housing premiums due to the spike in insurance costs. The edition told in more detail Fortune.
Homeowners were sent an email from Century Village saying they would have to pay an additional $100 to $200 per month due to "exploding premiums." Florida was the first to report the incident in connection with this.
Footage taken from the scene of the protests shows several residents huddled together. They are excited and scream (although what exactly they say is unclear). However, the protest appears to have intensified as the police have been called. However, one resident said the increase in spending is forcing him to sell his home.
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“We're already over $700 a month in Homeowners Association fees alone, and they're going to raise it to $1000 a month,” complained a local resident. “We have no choice, we have to sell.” And I actually just put my house on the market, literally 10 minutes ago.”
Florida's housing markets experienced a significant rise in property prices during the pandemic, and in most cases, prices are still rising. This is combined with mortgage rates that have more than doubled, with the average 30-year fixed rate recently hitting a 20-year high. But now there is a new force that is reducing housing affordability, and that is the increase in insurance premiums.
Homeowners in the state pay the highest premiums in the country, averaging $6000 a year, according to Mark Friedlander, director of corporate communications at the Insurance Information Institute in Florida. For comparison, in the US this contribution is on average $1700 per year. And recently, several home insurance companies either went out of state (eg Farmers Insurance) or decided to renew fewer policies (particularly AAA), making it harder for homeowners to find and purchase insurance.
“In the past 18 months alone, 15 companies have stopped operations in Florida. Seven of them have been declared insolvent,” Friedländer explained.
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There are several factors behind the outcome of the state's insurance companies, which range from claims fraud to increased claims following recent hurricanes to higher reinsurance rates. All this significantly increases the costs of insurance companies, and this increases the costs of policyholders. However, some insurers simply choose to leave the state, which only makes it harder for homeowners to find coverage and more expensive.
Insurance issues are already impacting the Florida real estate market, with a recent survey of home builders showing buyers' concerns about the availability and affordability of insurance are slowing sales somewhat.
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