The Ever-Changing Insurance Market Place in Florida

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By Joe Capers, Insurance Zone

It has been two years since we wrote about the changing insurance market place in Florida. Because we are nearly surrounded by water with the possibility of storms and other natural disasters so evident, the cycles are much more pronounced.

Typically, insurance industry cycles will last anywhere between two to ten years. The market cycles rely on the way the nation, and for that matter the world, is operating, in addition to storms and other natural disasters, COVID has impacted the marketplace. In this edition we will take a condensed look at what factors are driving these market shifts, the differences of a hard and soft market, and the effect on your personal and business insurance programs.

In a soft market, there will be an increase in competition and pressure on lowering premiums. This cycle is usually followed by a hard market because carriers are underpricing coverage to secure market share. In a soft market you can usually find lower insurance costs, broader coverages and more liberal underwriting guidelines. This is an advantage for anyone who is purchasing insurance. With increased capacity, the consumers have more Insurance carriers and enhancements to choose from to design their insurance program. A soft market increases the amount of competition between insurance companies.

A hard market is a time when premiums increase while capacity or the ability to write more premiums is diminished. These past two years for the Florida insurance market have certainly been one for the records. Higher premiums, more stringent underwriting and less competition is playing into the advantage of insurance carriers, and make it difficult on consumers. This is a good time to have a comprehensive insurance review.

COVID has definitely impacted the insurance industry as well. The pandemic has certainly highlighted coverages that are included in contracts. Insurers have seen an increase in insurance claims while suffering investment losses. But there are other factors that should be mentioned that have added to the creation of the hard market that we are currently experiencing.

Florida’s hard insurance market is tougher than any other market cycle in most other states. The challenges are exacerbated by other “unique” market conditions such as natural disasters, litigation, fraud and increase in claims frequency and severity.

Many carriers are still working through their losses from the natural disasters, and the major storms of Hurricane Irma in 2017 and Hurricane Michael in 2018. These two events had a major impact on the rising reinsurance costs. Reinsurance is an essential product, purchased by insurance carriers to mitigate catastrophic exposures.

Fraud is another factor impacting the insurance market. The more prevalent schemes are related to assignment of benefits from some roofing contractors and mold remediation companies. Another factor impacting the Florida industry is the escalation of litigation in our state. There are some public adjusters teaming up with personal injury attorneys to file frivolous claims creating unnecessary litigation. One recent study shows that 8% of all homeowners’ claims nationwide are in the State of Florida, but 76% of all homeowners’ claims lawsuits are in the State of Florida!

Whether you are seeking personal or business insurance, navigating the market can be challenging. The bottom line for the Florida insurance market right now is that the industry is on life support and consumers are facing double digit rate increases. Policyholders are paying more money for less coverage. Regardless of what you’re after, it’s important to find an insurance professional who can help you manage your insurance program during the market cycles. An independent agent with multiple carriers should be of great assistance in any market.

Insurance Zone, founded by Joe and Lea Capers, is a full service commercial and personal lines insurance agency serving Destin, Miramar Beach, Santa Rosa Beach (30A) and Inlet Beach. Visit their Video Library on and watch several informative videos on ‘Homeowners, Condo, Business and Umbrella’ or call (850) 424.6979.

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