The Florida insurance market and its internal impact

Are you a homeowner struggling to get insurance in Florida?  Well, it’s not just you.

The insurance crisis in Florida continues to grow, mainly impacting auto and homeowners insurance customers. Due to a unique set of factors and inflation, prices continue to surge across the insurance market in Florida putting consumers in a difficult position to obtain insurance coverage. Yet, consumers aren’t the only ones affected by these increases as agents prepare to adjust to the chaos. 

“In the absence of value, price matters. My greatest desire as an agent is to educate people on financial matters and teach them the importance of protection.” tells local State Farm agent Luis Peters. 

Insurance can be challenging to sell as it’s intangible and people cannot see its immediate benefits. Furthermore, the terms and values of complex policies can be difficult for customers to understand. These factors add onto the difficulty of insurance sales, but the market in Florida complicates things further leading customers to look for the lowest price possible. Due to Florida’s geography and location, weather risks, costly claims, and fraud, insurance premiums tend to be higher than most states. Homeowners and drivers are amongst the country insurance wise.

Auto Insurance in Florida

State minimum auto insurance coverage consisting of Personal Injury Protection (PIP) and Property Damage (PD) is mandatory for all registered vehicle owners in Florida. Additionally, it is a legal requirement to carry active proof of insurance in your vehicle at all times. Although bodily injury and “full coverage” is not mandatory, Florida is susceptible to hurricanes and other weather related disasters, has the highest rate of uninsured drivers and has a high number of costly claims. These factors coupled with increased vehicle replacement costs and inflation have all contributed to the hikes in premium. These factors have also increased the demand for auto insurance coverage. The minimum requirements for auto insurance does not cover repair or replacement of your auto nor does it protect the driver in the case they injure someone, two things drivers may not be aware of. Through excellent customer service, agent’s and team members help educate prospects and build trusting relationships with customers to connect with individuals who value the importance of their auto and its protection. 

“Becoming an agent is still a good opportunity, but not as good as 30 years ago,” says longtime Miami insurance agent Rick Gonzalez. “Fraud, exposure management and government regulations have made it cumbersome to do business.”

Homeowners Market

The best way to describe homeowners insurance right now: risky. The homeowners insurance market in Florida, like the auto market, is unique due to the state’s geographic location and climate. Florida is prone to tropical storms and hurricanes, posing major risks to the homes of the area. This coupled with increased construction costs, litigation and increased reinsurance costs (insurance for insurance companies), has led to a homeowners insurance crisis in Florida. In 2022, Florida accounted for 9% of home insurance claims but represented 79% of the U.S. property insurance lawsuits. Private insurance companies are hesitant to provide coverage in Florida due to these weather risks and costly claims found which unfortunately limits the options homeowners have, specifically in the South Florida region. Customers have been left with little to no options following these high increases.

“Servicing property insurance has become more difficult than selling it. Many of my conversations have been heart-breaking, especially informing elderly homeowners of high increases or cancellations they can’t afford.” states Melissa Gonzalez Santiago, 19-year insurance representative. 

Although selling and servicing has become harder in recent years, there still is value in an insurance agent position. Becoming an insurance agent can provide job security as coverage and protection is a necessity for many businesses and consumers. As long as there is a demand for insurance, there’s a demand for agents. The market for protection is in high demand and consumers are in search of representatives that can help them cover their assets. To become an agent in Florida, you must have a high-school diploma, have the proper licensing in the type of insurance being pursued, pass a mandatory state licensing exam and the necessary background checks.

As the insurance market in Florida continues to change and challenges arise, customers and agencies are working hard to adapt. It appears that the main issue that persists in insurance sales over the years continues to be the lack of understanding amongst customers. Building relationships with trust allows agents to spread knowledge to their communities and help sell insurance, as it is very important, just a bit complex. Agents continue to help people manage the risks of daily life and brace for the unexpected.

Kimberly Peters is currently a senior at Florida International University pursuing a degree in digital media and journalism. She is passionate about writing and hopes to pursue a career in sports journalism.