Why homeowners' insurance is spiking for states like Florida, options are shrinking
WEST PALM -- Home insurance rates nationwide have jumped 19% over the past five years, according to the insurance site Valuepenguin, but people in states at risk of extreme weather, like Florida, are seeing much larger increases.
Gregg Weiss is one of those people. While he realizes living in Florida means the possibility of seeing a hurricane, he is shocked when he sees the premium for his home insurance double. "Our windstorm insurance went from $10,000 a year, and then when it came up for renewal, my agent quoted me $20,000," said Weiss.
Other homeowners are paying even more. In the past five years average home insurance premiums in the Sunshine State have tripled, with no relief in sight.
People with a mortgage have to have insurance. So Weiss, who is also the Mayor of Palm Beach County, chose to do what many of his constituents are doing. He paid off his mortgage and dropped his insurance completely. "I mean, if you think about it $20,000 a year, we've never had a claim," he said.
It's not just Florida. Homeowners in states around the nation are seeing insurance rates go up. California and other states at risk of wildfires are also seeing steep increases, with rates quadrupling in certain areas. Some insurance companies are dropping homeowners completely.
"As long as insurance companies are not successful financially in these markets, they're going to pull out," said Oscar Seikaly CEO of NSI Insurance Group.
He said he's never seen the market this was in 35 years in the insurance business. According to Seikaly, higher rebuilding costs and more frequent extreme weather events are likely to make the situation even worse.