HERNANDO — As hurricanes have ravaged Florida, home insurance costs have surged, putting a strain on waterfront residents. Deanna Overkamp, 63, who moved to Hernando Beach in the early 2000s, said her homeowners insurance bill had doubled compared to last year, causing her to have to shop around for a new policy. “A lot of people out here really got hit with homeowners insurance, it like doubled,” she said. “So, from $2500, it went to like $5000.”
During Hurricane Milton, Overkamp’s home was severely impacted, with about six feet of water flooding the inside. Something had smashed into the garage, unleashing a massive flood that swept through the house, ripping shelves off walls and peeling the carpet off the floor. “The whole house was pretty much underwater,” Overkamp said.
Lex Barker, an independent insurance agent and former Allstate Agent, said the rise in homeowners insurance rates is a result of the number of hurricanes that have struck Florida over the past three years. “We just got through two this year that has caused the tremendous amount of damage and dollar losses,” Barker said. “So, the companies will more than likely raise premiums to recoup the losses that they’re paying out.”
Danielle Healis, general manager of Killingsworth Insurance, who has been working at the agency for about 36 years, said fraud and price gouging are significant causes of the rise in homeowners insurance. “The normal cost of hurricane losses is one thing that insurance companies can handle,” Healis said. “It’s the fraud and, unfortunately, the price gouging that makes it difficult to stay competitive.”
Homeowners insurance prices are determined by the home’s overall risk and exposure, along with its history of past losses, Healis said. “Insurance carriers are highly regulated by the state of Florida,” she said. “They can’t just, you know, increase their rates without getting approval.”
For residents in high-risk areas, it can be hard to find companies willing to insure them. Andy Warrener, 46, who lives along the Withlacoochee River, believes that the river’s flooding could lead to his insurance company dropping his coverage. “I’m gonna make a claim, and then they’re probably going to drop me, and then I’ll have to go look for some more.”
Keith Holcomb, 61, who also lives near the Withlacoochee River, said over the past six years, he has been through five different insurance companies, all of which dropped him due to the high-risk nature of his location. Holcomb is now covered by Citizens Property Insurance Corporation. “They’ll just say they’re no longer covering, and that’s it,” he said.
In Florida, it’s common for people to be insured by Citizens due to the high hurricane risk and the state’s coastal exposure. Barker said that 20% of the policies he writes are through Citizens. “If the insurance company doesn’t want to write in Miami, they’re not going to write in Miami because they can’t get enough premium to cover losses.”
The farther north you are in Florida, the less likely you are to need coverage through Citizens, as more options with other insurance companies are available, said Barker. However, the farther south you are, the higher the risk becomes.
Barker said he can only write insurance policies through Citizens after he has received two rejections out of the 20 companies he has submitted to.
Barker writes policies for homeowners insurance by accessing the tax rolls to gather information about the house, such as its build, whether it is one or two stories and its square footage. He then inputs the details into TurboRater, a tool that helps insurance agents compare quotes from multiple carriers to find the best coverage. TurboRater provides Barker with the top five companies offering the best rates, which he then presents to his clients.
“Each company has a different rate, of course, depending on their loss history. So, if one company has had a tremendous amount of losses in a certain area, their rates are going to be higher than another company that could be in the exact same area that didn’t suffer the same losses.”
According to the Insurance Information Institute, the average price of homeowners insurance in 2021 was $2,437, which was a $272 increase from 2020 and a $449 increase from 2019. In high-risk areas, such as Hernando Beach and along the Withlacoochee River, homeowners insurance costs about $4,500 to $6,000, said Healis.
While both homeowners insurance and flood insurance have increased, flood insurance has not risen at the same rate as homeowners insurance, Healis said.
Flood insurance is a national program that the US government handles, while homeowners insurance can be purchased through independent agencies, Barker said.
“The damages to your house from rising water from the ground up that’s flood insurance,” Barker said. “If your damages from the rain and down from, like, your ceiling, that’s your house insurance.”
Kathy Orloff, 63, has lived in Hernando Beach since moving there from New York in 2010. She experienced significant losses during Hurricane Helene, with three feet of water flooding her home. A large portion of her belongings ended up piled in two large heaps on her front lawn.
Orloff said that she didn’t experience much wind damage during the hurricane, meaning that most of the repair costs would need to be covered by flood insurance rather than homeowners insurance.
Healis explained that flood insurance is most likely to cover most of the costs from the last two hurricanes, as the storm surge in Hernando Beach caused significant damage, along with flooding from the Withlacoochee River. Due to the homeowners insurance rates, many homeowners are now choosing not to purchase coverage.
Healis said that going without home or flood insurance isn’t worth the risk, as the cost of rebuilding after a hurricane is extremely high. Many people have their entire savings tied up in their home purchase and don’t have the funds to repair it afterward if they’re not insured. Also, the costs of materials and labor are constantly increasing, making rebuilding even more expensive.
“I think it’s going to hurt them financially because when you go through a time frame where there’s no claims and no storms, it doesn’t seem like such a bad idea until you get hit with one and realize the huge impact by not having that coverage,” she said.
Homeowners can take steps to reduce their insurance premiums by replacing outdated roofs, adjusting deductibles and modifying coverage limits for their homes, said Barker.
The time it takes for insurance companies to process payments depends on the extent of the damages to a homeowner’s property. Those completely displaced by the hurricane are usually prioritized and given money until their claim is finalized. However, insurance agents do not adjust claims; it is up to the carriers to determine who’s a priority, Healis said.
“But in my experience, yes, the ones that are completely displaced are made a priority.”
A major impact of the rising homeowners insurance, Healis said, is that a lot fewer people are buying homes because they can’t afford the insurance, or they are not buying homeowners insurance at all. “I don’t know that there’ll be as many people purchasing homes because they simply can’t afford the insurance,” she said. “I think that’s going to affect the whole homeowners market greatly because of that.”
