Putting The Power In The People’s Hands

Florida homeowners may face higher premiums

On Behalf of | Feb 27, 2019 | Hurricane Damage Claims

Many Florida homeowners have suffered greatly as a result of hurricane damage in recent years. Now, they may face higher insurance rates as insurance companies cite unprecedented levels of growing losses after Hurricane Irma. In addition, industry experts said that their costs related to assignment of benefits (AOB) lawsuits and loss investigations are driving up their expenses.

One reinsurance brokerage said that hurricane damage claims after Irma have gone up much more sharply than expected, reaching as high as 26 percent above the initial estimates. Because the losses are growing later than expected, companies refer to these changes as “loss creep.” Despite the fact that many of these expenses have grown due to the practices of insurance companies themselves, the brokerage said that homeowners may pay the price in the form of increased insurance premiums. The reinsurance companies said that one of the sources of increased costs for insurers was the use of private investigators to delve into claims for damages submitted by their clients. Therefore, the insurance companies’ costs may be escalating because of the level of scrutiny applied to homeowners’ claims.

Others pointed to AOB agreements as a factor in driving up costs. Under an AOB, a company will perform work on a damaged home or business in exchange for the policyholder giving the firm the right to collect directly from the insurance company. This process does not require insurer approval and disputes with certain contractors have led to costly lawsuits. In 2000, there were only 1,300 lawsuits related to AOB agreements. That number reached 135,000 by 2018.

In many cases, Florida residents face obstacles and delays when they try to collect on their homeowners’ insurance claims after a damaging storm. By working with an insurance law attorney, a homeowner could work to defend their rights and secure the payouts they deserve.