20 Sep Water Loss – becoming a norm in South Florida
Over the past couple of years we have seen an increase in water damage claims especially in South Florida. This has caused many insurance carriers to pull out the area or provide less coverage, but instead of reducing premium, they have increased premium. In most cases much higher than last year. Most carriers in South Florida are reacting in one of two ways.
- Non renewing your home insurance and pulling out of our area. If you have is more than 30 years old, you most likely fall into this category.
- If a renewal is offered, the terms and conditions have change. Read your policy to see what changed. most of these changes are in 2 areas.
- water damage coverage – or the carrier has removed water damage completely – NO WATER DAMAGE COVERAGE AT ALL. Or you have a sublimit of $10,000 for water damage. Note it doesn’t state pipe damage, so if you have a tree fall on your home and damage the roof and as a result, water comes into your home and caused a $40,000 damage, you only have $10,000 of coverage – minus your deductible that most likely is at least $2,500.
- The way you can file a claim- there is a change in terms here too. the reason for this a new law past last year is reference to Assignment of benefits reform – Citizens Property Insurance Company put together an educational video to consumer’s – AOB Video
I remember in 2006, we faced a similar problem of Home insurance premiums spiking up in 1 year. The response was – requires Home insurance carriers to offer 4 installment plan, and introduce a new Wind uniform Mitigation report to offer opening protection (shutters or impact glass) and roof wall connection credit – (the way your roof is connected to the walls). Homes with MIT credit benefit from better rates.
What is happening now, insurance was never indented to pay for the maintenance and up keeping of your home, the intent of insurance policy is to help you recover from a catastrophe that is covered on your insurance policy. So now with less markets, there is less competition among carrier. therefore, they can charge more. At the same time, that are also doing more tricked underwriting. ALL homes 30 years or more have to have a New passing 4 point inspection. And the Surplus lines carriers like Lloyds and Scottsdale for example, are also doing an actual physical inspection AFTER coverage is bound.
This is a very tough situation and I don’t like to say that there is nothing we can do. Just like it took 5-7 years for carrier to take this step, we need to work on getting more carries to come back. Insurance carriers are in the business of making money, when carriers look at South Florida, they take into account that we are a Hurricane state. They know they are going to pay claims, so they figure out a formula to calculate premiums that take into account the risks in South Florida. paying for additional AOB Froud was not in anyone’s salutations.
So what can we all do?
- Beware of AOB fraud I referenced in the Citizens video above and also in this clip from 2017 warming consumers too
- try to prevent water damage claims from accruing – In general – there are cost effective water leak detection tool that can be installed under the sinks and faucets that connect to your phone and let you know when a leak is detected – I personally like Govee they are easy to install and connect to your smart phone. In some condos the association installs a system that is monitored by the security in the building.
- Kitchen: check for leaks on a regular basis – if you see signs – take care of them right away, don’t wait.
- Dishwasher – check for leaks under sink where the hose connects to the water supply.
- Refrigerator – if you have an ice maker, make sure the connections are good.
- AC Unit – make sure you change the filters regularly – and do a routine maintenance on the unit.
- FGUA offers some tips on water leak detection
- There are several home warranty programs out there that help with the cost of maintenance and service. this is not an insurance policy. A word of advise, read the contract, from my research, many companies cap the replacement of an AC unit at $2,500 – so read the warranty contract so you know what are your sub-limits, if any.
- On most all home insurance policies, there is a $10,000 Mold sub-limit – this is really not a lot of coverage, if you should get mold in your home – Try to keep your AC and pipes well maintained to avoid any water seating for a period of time that will create mold.
Together, if we can reduce the amount of water damage insurance claim sin South Florida, we can help bring back better coverage and more carriers.