Inflation and Homeowners Insurance in 2022

Inflation, meet Florida homeowners insurance. Like the rest of America, the Sunshine State is experiencing the effects of inflation. Supply shortages, repair costs, limited inventory and a struggling economy are affecting the cost and availability of homeowners insurance in Florida.

Let’s talk about how increased repair costs and supply chain issues continue to have an impact on Florida home insurance costs and how you can be an informed purchaser of this pivotal coverage.

First, it’s important to actually answer the question: Do I need homeowners insurance in Florida? Legally: no. Practically: a resounding yes.

A home is a major investment that nearly every homeowner is going to want to protect. Therefore, it is imperative to purchase, at the very least, minimum home insurance. Thanks to inflation, even the bare-bones coverage for Florida homeowners is more expensive today than before the coronavirus pandemic.

Still, it is possible to insure your Florida home in a smart manner. Working with an insurance professional can help to give you peace of mind that you have not over or under-insured. Whether you have a beachfront residence with stunning views of the Gulf or an inland ranch abode out of the sight of water, proper coverage hinges on matching your exact needs to the coverage available in the marketplace.

Inflation and its impact on Florida home insurance costs

Why is this price increase happening?

It should come as no surprise that COVID-19 is one of the main reasons for the increase in homeowners insurance costs. Thanks to inflation sparked by the novel coronavirus, home costs continue to rise. One example of this is the roofing sector, which is not immune to these rising costs. Material and labor prices have both risen. Supplies like shingles are harder to find because of supply chain issues, and scarcity leads to higher prices passed on to consumers.

Additionally, with a rise in home purchasing cost comes premium rate increases. Premiums are not arbitrary rates that insurance companies guesstimate, after all; they take into account property location, loss history, type of property, and, of course, the type of coverage you wish to elect. Since home prices continue to spike, premiums stand to do so as well.

The change is all around us, and Florida homeowners insurance is not immune to the higher price phenomenon. There is the sticker shock we feel at the grocery store, where the bill keeps getting larger for the same food we have purchased for years. Home repair and construction projects are priced at a premium due to supply shortages and consumer demand in the housing sector. Globally, shortages continue to affect the world’s citizens on multiple levels.

Inflation can be traced to this overall increase in cost of goods. The roofing sector is a prime example. Today, when a Florida homeowner files a claim for repair, the insurance company is going to have to pay more to repair the home in accordance with the policy. That means rising Florida homeowners insurance costs for all as insurance companies raise their rates in an attempt to remain solvent. Unfortunately, several insurance companies have become insolvent this year; others went insolvent as far back as 2018.

Within this ‘doom and gloom’ outlook comes a bit of light: policies are usually issued annually. That means you may not see any rate difference until that expiration date looms and the renewal of your policy is imminent. Partnering with Florida home insurance advisors who understand both insurance trends and your unique coverage needs is pivotal.

Affordable home insurance options

The way to find the most affordable Florida homeowners insurance options is to truly know how much insurance you need. This is a tough forecast to make, and it is an individual one. Based on certain risk factors and your own comfort level with risk, a Florida homeowners insurance election should be a carefully curated, individualized policy. Here are some elements that can help.

  • Work with a Florida homeowners insurance advisor who truly understands our insurance marketplace. The ideal partner in this decision is an advisor who makes it their duty to understand risk and how to mitigate it in today’s purchasing climate.
  • Consider different options. Perhaps a certain level of coverage that stood you well in the past no longer seems practical. In this state of change, it is worth looking at that past policy and seeing if there are any gaps – or if you assume more risk. For new construction, the options will be different.
  • Is it time to raise your deductible? -Perhaps. Yes, if you need to file a claim, this strategy is going to hit you in the pocketbook. Consider the cost/benefit analysis of this choice before making it.
  • Remember that there is a difference between rebuilding costs and what you actually paid for new construction. This is an important element because rebuilding in the current market is more expensive than in years past.
  • Now may be the time for those impact-resistant windows and other safety upgrades. You may see a decrease in the Florida homeowners insurance rate because of it. Remember the old saying “That place is strong like Fort Knox?” Fortify your structure and make it impervious to the elements, and your rates may decrease. This brings to mind the insurance policy on Fort Knox…but that is for us to examine in another article. Perhaps.
  • Secure, secure, secure. Have you been considering home security measures? Alarms, sensors, and the like? You may see a policy decrease because of such upgrades.
  • Ask for more savings. Skyrocketing interest rates and rising insurance premiums have some consumers wondering if they can still afford home insurance in Florida in 2022. That leads surfers of the Internet to type in queries like Who offers the cheapest homeowners insurance? It can be tempting to just type that question into a URL search engine and select the first option that’s visible.

It bears saying again and again that working with a Florida homeowners insurance advisor is likely the easiest way to procure this knowledge. Instead of spending your time researching, let the homeowners insurance specialists do it for you.

Homeowner financing options to consider

After home improvements such as safety upgrades and fortifying measures come different homeowner financing relief programs. These programs that are designed to cushion the blow of COVID-19 on homeowners include Homeowner Stimulus and Homeowner Assistance Fund.

Homeowner stimulus – Congress has not levied a homeowner stimulus package. Still, homeowners may be able to find refinancing options, and lenders still offer forbearance (or the ability to pay at a lower rate).

Homeowner Assistance Fund – For those most affected by the onslaught of COVID-19, the Homeowner Assistance Fund can help keep them afloat financially. These monies can be used for homeowners insurance, mortgages and more. Additional information about the Homeowner Assistance Fund, which is a national program, is found here.

Many factors affect Florida homeowners insurance costs, and understanding how much it costs to insure a home in Florida and how to best do it is possible. Trust the advisors of W3 Insurance to provide up-to-date guidance regarding Florida home insurance for your unique abode. Your needs are different from anyone else’s, and it takes a personalized examination of those needs and the insurance products available today to make the most informed decision regarding coverage.

Coverage prices may fluctuate, but solid advice does not. Contact W3 Insurance today and have an experienced advisor at your side as you make an informed decision regarding Florida homeowners insurance for your residence.