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L & M Insurance Group Combines Personalized Service with Insurance Companies You Can Trust

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Independent insurance agencies like L & M Insurance Group, offer many advantages to insurance consumers. One of the main ones is that we are independent—we represent many different insurance carriers, and therefore are able to offer our clients a choice of tailor-made policies. Part of our commitment to you is that we’re always trying to find new and better markets for our clients.

Many clients turn to an independent insurance agency to save money. But just because you go the independent route doesn’t mean you’ll have to scrimp on service or sign up with an insurance company you’ve never heard of. While it’s true that we do represent some smaller, lesser-known companies, here are a few of our partner companies that you might not realize we work with:

Did you know?

We now represent Allstate, a company that historically has only sold policies through their own captive agents. Allstate may or may not be a good fit for you, but they are well known for their leadership and expertise in personal lines, claims and customer service, as well as their financial stability.

We also represent Nationwide Insurance. The Ohio-based insurance carrier provides a range of insurance and financial services, including auto, home insurance, and commercial policies.

Travelers has been around for more than 165 years and is a top-10 writer of personal insurance in the U.S. In addition to personal lines, they also write landlord policies and commercial policies for many types of businesses.

Mercury Insurance has been named one of “America’s Most Trustworthy Companies” by Forbes Magazine several times. They offer auto, home, condo, renters, and business insurance. We’ve found that Mercury is a good fit for families with young drivers.

The Hartford offers a full line of personal and commercial policies. They also have special programs for drivers over 50, and The Hartford is the only direct auto and home insurance program endorsed by the AARP for their members. 

In addition to the companies listed above, we also represent Progressive, Safeco, GMAC, and many other financially stable insurance carriers. Whether you need insurance for your home, car, motorcycle, boat/personal watercraft, or you need commercial insurance for your business, we can get you covered.

Personalized service

So if you want to combine the personalized service of an independent agency with the benefits of a big-name insurance company, look no further than L & M Insurance Group. We will be happy to compare insurance rates of both well-known insurance companies (like Allstate) with our lesser-known carriers, and explain the benefits and drawbacks of your options. Give us the chance to serve you—please call us at 813-672-4100 if you’d like a quote, or get things started online by clicking below for an auto or homeowners insurance quote.

Home insurance

Auto insurance

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Own a Townhouse or Condo? Which Homeowners Policy Do You Need—an HO-3 or an HO-6?

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If you’re buying a townhouse or condo, you might think that because your unit is one of a larger building, your home insurance needs will be different. This is not necessarily true.

The Difference between HO-3 and HO-6 Insurance Policies

As you may be aware, there are several classifications of home insurance policies. If you own a townhouse or condominium, you will likely be buying an HO-3 policy or an HO-6 policy. Both of these policies cover your personal property, the interior finishes of your unit (walls, flooring, ceilings, etc.), and your liability. The main difference between and HO-6 condo policy and an HO-3 policy is that under an HO-6, the building structure and exterior are not covered. Therefore, if your townhouse or condo were to burn down or be destroyed in any other way, you would only receive an insurance claim payout to reimburse you for your personal belongings and the interior finishes—not the structure itself—a considerable difference in reimbursement.

How a Master Building Policy Can Save You Money

Some clients who own or are buying a townhouse ask about the possibility of buying the often cheaper HO-6 condo policy rather than an HO-3 homeowners policy. An HO-6 policy is only appropriate if you have a condo association that has a master building policy that will cover the entire structure of your building, not just part of it.

HO-3 Insurance Policies Protect Your Condo or Townhouse

If your association doesn’t have a master building policy that will pay if your unit is destroyed, your mortgage holder will likely require that you buy an HO-3 rather than an HO-6. Even if you don’t have a mortgage, it’s also in your best interest to do so, because if you have a total loss, your claims payout will come nowhere near being enough to reimburse you for your losses.

An independent agency that works for you

We understand that homeowners insurance in Florida can be expensive, and we all want to save money where we can. However, you don’t want to skimp on insuring your home. The purpose of homeowners insurance is to provide you with peace of mind, whether your home is a townhouse, condominium, or traditional home.

At L & M Insurance Group, we represent multiple homeowners insurance companies, and we’re committed to finding you the most cost-effective policy to suit your needs. Please call us at 813-672-4100, or request a homeowners insurance quote online. We are an independent agency and we work for you!

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Don’t Let Your Holiday Go Up in Flames!

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The holiday season is upon us—finally something to celebrate in this challenging year! Most of us are decorating the house, wrapping or mailing gifts for loved ones, and planning (cautious) holiday meals. Unfortunately, the holiday season is also a season of accidents, fires, and other mishaps. Just because you’re celebrating, don’t neglect safety precautions. No one wants to have to file a homeowners insurance claim in the middle of their holiday celebrations.

Holiday Fire Prevention Tips

One of the major and most devastating holiday risks is a house fire. Here are some holiday fire safety reminders from the National Fire Protection Association (NFPA) and the American Red Cross:

Christmas trees

  • If you have a live tree, make sure you keep it watered. A dried out Christmas tree can catch fire and burn in an instant (click here to see a video).
  • Even if your tree is artificial, be sure to turn off the lights on your tree before going to bed or leaving the house.

Electrical

  • Make sure holiday light strings are in good condition, with no loose or damaged wires or connections that could shock you or start a fire.
  • Don’t overload electrical outlets or connect more than three strings of incandescent lights together—use a power strip if you need more than three strings of lights.
  • Don’t pinch cords or force them into small spaces, put them under rugs, or use staples or nails to position them. Keep all cords away from heat sources.
  • Make sure you hang light strings where they’re intended—some are only for use indoors or outdoors, not both.

Fires and candles

Flickering candles and firelight are certainly beautiful and festive, but they can also lead to home fires.

  • Make sure all open flames are at least three feet away from anything that could catch fire—two out of every five decoration fires happen because decorations are too close to an open flame.
  • Don’t leave candles or fires burning when you go to bed or leave the house.
  • Make sure children and pets are not left unattended in a room where there is a fire or burning candles.
  • If you’re celebrating with a menorah or kinara that uses candles, make sure to keep all flammable items at least three feet away, and place it on a non-flammable surface, like a tray covered in aluminum foil.
  • Consider using battery-operated candles, since candles cause more than a third of home decoration fires.
  • If you have a fire in the fireplace, use a fire screen to keep sparks from flying out and starting a fire. Keep clothes, wrapping paper, and decorations at least three feet away.
  • Keep matches and lighters up high and locked away to keep little ones safe.

Cooking

Historically, Christmas Eve and Christmas Day have been two of the three leading days for home fires caused by cooking (Thanksgiving is number one).

  • Stay in the kitchen when you’re cooking on the stovetop.
  • Turn pot handles toward the back to help keep kids from grabbing them.
  • Make sure all flammable items are kept well away from the stove.

One more thing…

Remember to make sure your smoke detectors and fire extinguishers are in good working order. And if you have one, review your emergency fire escape plan with your family.

No matter how you celebrate this year, we hope you have a very happy and safe holiday season. And remember that if you’re in need of insurance, L & M Insurance Group is here for you. Give us a call at 813-672-4100 or contact us online. Happy holidays!

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Insurance 101: Terms You Should Know

by Posted in Auto Insurance, Homeowners Insurance, Uncategorized Tagged , , Leave a comment

Just like any specialized industry, insurance has its own vocabulary. When you’re shopping for a new policy—or trying to make sense of the policy you already have—it helps to understand some of the most commonly used insurance terms. Plus, understanding these terms can also help you get the best insurance rate. How? Because understanding a few key terms will help you compare policies accurately, buy the coverage you need, and even help determine how much money you’ll receive if you make a claim!

General terms

There are a few general terms that apply to several different types of insurance. For instance, you probably know that a deductible is the amount you’ll pay out of pocket before your insurance kicks in. An endorsement (also known as “rider”) is an amendment to the insurance policy that changes its coverage, terms, or conditions. Some examples of endorsements include a change of address when you move, adding or removing a vehicle or driver on an existing auto policy, or adding coverage for sewer backup to a homeowners insurance policy.

Homeowners insurance terms

One of the most important sets of terms you should know is actual cash value versus replacement cost. These terms are most often found in a homeowners insurance policy.

Actual cash value refers to the amount you would be reimbursed for replacing damaged or destroyed property with comparable new property, minus depreciation. Replacement cost is the amount needed to replace damaged or destroyed property or personal belongings without deducting for depreciation, up to the policy limit. If you make a claim thinking you have replacement cost but you actually have actual cash value, you could receive thousands of dollars less than you expect.

Car insurance terms

Occasionally, clients become confused about the different types of injury and liability coverage available in a car insurance policy.

Some states, including Florida, are no-fault states, meaning that drivers must carry insurance for their own injuries, regardless of who is at fault in an accident. This coverage is called personal injury protection (PIP). It covers both the named insured and his or her passengers.

Property damage pays for damage you cause to another vehicle if you’re at fault in an accident.

Bodily injury refers to coverage for injuries you cause in an at-fault accident.

Uninsured motorist pays for your injuries (once you have used up your PIP) if you’re hit by a driver who does not have bodily injury liability insurance or is underinsured.

Still have questions?

These are just a few of the more commonly asked-about insurance terms. There are many more. If you still have questions, don’t be afraid to ask your agent to explain. Personal service is one of the prime benefits of working with an independent insurance agency like L & M Insurance Group. Please give us a call at 813-672-4100 if you have questions about your policy. Please click here for a car insurance quote, or here for a homeowners insurance quote.

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What Your Homeowners Insurance WON’T Cover

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You expect your homeowners insurance to protect you if your home is damaged or destroyed by a disaster like a hurricane, if you’re burglarized, even if your home is hit by a car (or an aircraft)! But there are a few things that aren’t covered by a standard homeowners insurance policy, and you can save yourself a lot of frustration and heartache if you know what they are. Here are four of the most commonly misunderstood things a standard homeowners insurance policy won’t cover:

  • Floods. Many people are surprised to find there is no coverage for flood damage under a standard homeowners insurance policy. If you want flood coverage, you’ll need to buy a separate flood insurance policy. L & M Insurance Group represents several private insurers that write flood insurance policies at a more competitive rate than the National Flood Insurance Program (NFIP).  These private companies also provide higher limits, and often there is no waiting period, unlike with the NFIP policies. 
  • Sewer backup. A sewer backup can do a lot of damage, aside from the “Ick” factor. Anything from tree roots disrupting pipes to storm waters, to an outdated sewage system can cause a sewer backup, and it’s one peril that most homeowners insurance doesn’t cover automatically. The good news is, it’s usually not that expensive to add sewer backup coverage to your homeowners insurance policy. Ask your L & M Insurance Group agent how you can get this coverage.
  • Maintenance issues. Homeowners insurance is not intended to pay for maintenance issues, such as mold or water damage due to a leaking roof, insect or rodent damage, or general wear and tear. For example, if your roof is getting old and needs to be replaced, that is a maintenance issue, not an insurance claim. As a homeowner, you’re expected to maintain your home and keep it in good repair. Neglect or failure to maintain property is not a cause for a homeowner’s insurance claim.
  • High value personal property. Since certain personal property, like jewelry, is easily stolen, most homeowners insurance policies limit personal property coverage to around $1,500. This may not be enough coverage if you have valuable family heirlooms, expensive jewelry, furs, or an art or firearms collection. If you need more coverage, ask your agent for higher policy limits or a special endorsement to cover your valuable property.

Is it time for a homeowners insurance review?

Things change—so it’s a good idea to review your homeowners insurance coverage from time to time to be sure it still meets your financial needs. Please call us at 813-672-4100 if you have questions about your homeowners insurance, or you’d like to compare rates. (Click here if you prefer to contact us online.) As an independent insurance agency, L & M Insurance Group works for you, not for any individual insurance company. Our agents are experts in finding the best coverage for the most competitive rates—so give us a call and let us help you!

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Florida’s Extreme Weather: Tornadoes

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In addition to preparing for hurricanes, central Floridians should also be aware of another natural disaster common to our area: tornadoes. Surprisingly, Florida has a higher frequency of tornadoes (per 10,000 square miles) than any other state—and the coast between Tampa Bay and Fort Myers is one area particularly affected. While tornadoes in Florida aren’t usually as destructive as those in other areas, the problem, according to some experts, is that Floridians are often taken by surprise by them.

Tornadoes in Florida form because of a number of different weather conditions. They form along squall lines where masses of warm air converge, from isolated summer thunderstorms, within a hurricane, or ahead of the cooler air in a spring cold front coming from the north.

Some of the warning signs of an approaching tornado include:

  • Greenish skies
  • Hail
  • Dark, spinning, low-altitude cloud
  • Loud roar or rumble, like the sound of a train

So how can you be ready?

What to do

It’s simple to prepare for the possibility of a tornado. Make sure you have a safe room or space in your house that you can retreat to if a tornado is spotted in your area. This room should be on the lowest level of your home, and in a central space that has no windows, perhaps a bathroom, closet, or hallway.  It’s also a good idea to buy a NOAA weather radio, if you don’t already have one, so that you’ll be notified of official Weather Service warnings, watches and other emergency information.

If a tornado has been spotted near your home, head to your safe room, and crouch low to the floor and cover your head with your hands. Experts also recommend covering yourself with a heavy blanket or something similar to protect yourself from falling debris.

If you’re in a public place, such as an office building or store, calmly go to the lowest level, away from glass. Don’t use the elevator because you could become trapped if the power goes out.

If you’re outdoors or driving, head for sturdy shelter immediately.

Once the tornado has passed, check those around you for injuries, and seek help if needed. Also check for damage to your utility lines. Open the windows if you smell gas, and turn off the main valve, and don’t turn on anything electric or light any matches until the gas has dissipated. Turn off electricity if wires are shorting, and do not go near any downed power lines outside, especially if they are in water. Be careful of broken glass, nails, and other sharp objects.

Is Tornado damage covered by homeowners insurance?

Tornado damage is usually covered by a standard homeowners insurance policy. If a tornado damages your home, contact your homeowners insurance company or your L & M Insurance Group agent as soon as possible. Take photos of damage, and make any temporary repairs you need to avoid further damage.

Need a homeowners insurance quote? Let an L & M Insurance Group agent help you! Please call us at 813-672-4100, or click here to contact us online. L & M Insurance Group is a locally-owned, independent insurance agency in the Riverview/Tampa/Brandon area. We have more than 25 years of experience helping our neighbors with their insurance needs, and we’d love to help you.

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Looking for Cheap Insurance in Florida? Don’t Make These Mistakes

by Posted in Auto Insurance, Homeowners Insurance Leave a comment

Since Florida auto and homeowners insurance rates are some of the highest in the nation, we understand why you’re looking for ways to save on your insurance premiums. However, before you search for your next insurance policy, remember the purpose of insurance: to protect you financially in case of a claim, whether it’s to repair or replace your car, rebuild your house, replace your personal belongings, or protect your liability if you’re responsible for injuries or property damage. You need your claims to be paid, and you need the amount of the payout to make you whole financially, or protect you financially from a lawsuit. That’s why it’s important to find the right balance between a cheap insurance premium and insurance coverage that is adequate and appropriate for your financial situation.

So when you are looking for cheap insurance in Florida, don’t make these mistakes—they could cost you big.

Not carrying enough coverage.

Homeowners: Some people mistakenly insure their homes for real estate market value. In many cases, that’s not enough if your home is completely destroyed. If that happens, you’ll need to receive enough money to rebuild it. If you’ve only insured it for market value, you’re unlikely to receive enough money in a claim payout to do that. A better way to keep the cost of homeowners insurance down is to raise your deductibles—talk to your L & M Insurance Group agent about whether this option is right for you.

Auto: In the case of auto insurance, the mistake some people make is not carrying enough liability coverage. To fulfill the Bodily Injury section of the Florida Financial Responsibility Law, if you’re in an at-fault accident and you injure someone, you must carry Bodily Injury Liability coverage in the amount of 10,000 per person, 20,000 per accident at least. The problem is, those limits are likely far too low. According to Consumer Reports, the average payout for a car crash injury that doesn’t leave the victim incapacitated is $22,000. And what if more than one person is injured?

If your insurance limits aren’t high enough, you’re on the hook for the rest of the claim—or open to a lawsuit. Again depending on your financial situation, you will likely want to purchase higher limits of Bodily Injury Liability—the insurance industry recommends $100,000 per person/$300,000 per accident, and at least $50,000 for Property Damage Liability.

“Looking for cheap insurance in Florida may seem like a good idea, but going with the cheapest price, regardless of the strength of the insurance company or the quality of its customer service may have consequences.”

Price is important. But it’s not the only consideration. If you have a claim, or any kind of problem with your insurance, you’ll want an insurance company that will be easy to work with—and will pay your claims. An independent agency like L & M Insurance Group can steer you away from companies with shaky financials or poor customer service.

Not buying flood insurance.

Flood damage is not covered by a standard homeowners insurance policy, and Florida, flat, surrounded by water and a target for hurricanes, is almost entirely at risk for flooding. Even if you don’t live in a high-risk area, between 2014 and 2018, more than 40 percent of all National Flood Insurance Program (NFIP) claims came from outside of high-risk areas.  And flood damage is expensive—just one inch of water can cause $25,000 worth of damage, according to FloodSmart.gov. (L & M Insurance Group has several competitive private insurance companies that write flood coverage, often for less than you’d pay through the NFIP.)

Not checking insurance rates at renewal.

At least once a year, it’s a good idea to review your insurance coverage, and check that you’re still getting the best deal you can for your circumstances. Just remember, when comparing rates from different companies, compare “apples to apples”—that is, each quote you get should be for the same type and limits of coverage.

As an independent agency, L & M Insurance Group will help you make the most of your insurance money. We represent multiple financially sound auto and homeowners insurance companies, not just one. We take pride in helping our neighbors in Riverview, Brandon, Valrico, and surrounding areas find the most cost effective insurance options for them. Please call us at 813-672-4100 or contact us online for a no-obligation quote.

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Don’t Be the Victim of a Roofing Scam

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Replacing a roof will likely be one of the larger expenses you’ll have as a Florida homeowner. And while you’re probably looking for ways to save money on that major expenditure, be aware that roofing scams are common, and could leave you out of pocket with a roof still in need of repair, or worse yet, on the hook for insurance fraud.

What are some of the most common roofing scams?

Roof scammers take advantage of homeowners by trying to convince them that they can get it done a lot cheaper—or even for nothing. They may do shoddy work, not complete the job, or simply take your money and disappear.

There are a couple of scenarios you should watch out for. One of the most common is for “storm chasers” to come through a neighborhood after a storm, talking to residents or leaving flyers offering to fix damaged roofs, sometimes “at no cost to homeowners.” How is that possible? They may tell you they’ll pay your insurance deductible, or have you sign a contract that includes an Assignment of Benefits (AOB) clause. AOB is an agreement that transfers an insurance claim’s rights or benefits of the policy to a third party (in this case, the roofing company)—that third party files the claim and collects the insurance payments. This sounds good in theory, but in reality has become a huge source of fraud. The costs associated with Assignment of Benefits abuse are a prime reason homeowners insurance is so expensive in Florida.

Another scam involves someone knocking on your door offering to do a free roof inspection. They often say they’re doing work in your neighborhood and will offer you a good deal.  Sometimes they even say they just happened to be driving by and noticed some damage on your roof! (If you think about it, how likely is that?) Of course, they will claim they found damage, possibly when there is no damage at all, or not enough to warrant replacing your entire roof. In some cases, scammers actually damage your roof themselves.

Other scams include lowball estimates or requiring a large down payment before starting work. While of course you want to be budget conscious, you may not want to go with the lowest estimate for a roof replacement. In the case of a roof, where quality work is especially important, lowest is not always best. It’s likely either the work will be poor, or they’ll come back in the middle of the job for more money because of “unforeseen” problems or increases in the cost of materials.

You should also avoid making a large down payment. The industry standard runs around 20 percent, so if a roofing company asks for a lot more, that’s a red flag.

How to protect yourself from roofing scams

Replacing your roof is a major investment, so how can you increase the odds that you’ll have a good experience?

First, be wary of unsolicited offers to do a roof inspection. There are many honest and legitimate roofing companies out there, but they probably won’t be going door to door to drum up business. If you know your roof needs to be inspected, repaired, or replaced, ask your friends and relatives for recommendations, or consult a home repair rating service such as Angie’s List or homeadvisor.com.

Before signing a contract, ask for local client references, and call them to see if they were satisfied with the work done. Check with the Better Business Bureau to see if there are any complaints about the roofing company.

Require a written proposal that includes a full description of the work to be done, start and finish dates, and a payment schedule. Make sure you have the roofing company’s business address, telephone number, and tax id number. Ask to see copies of their contractor’s liability insurance and worker’s compensation certificates, so that if one of their employees is injured while working on your roof, you will not be held liable.

Do NOT be pressured into signing a contract without doing your own research.

Do NOT sign any contract that contains an Assignment of Benefits clause without checking with your insurance company or L & M Insurance Group insurance agent first.

L & M Insurance Group is here to help

If a roofing company approaches you with a deal that sounds too good to be true, it probably is. Avoid roofing scams by getting recommendations from trusted sources, and don’t be afraid to take your time and ask plenty of questions. Please feel free to call your L & M Insurance Group agent at 813-672-4100 if you have questions about whether or not a roof repair or replacement will be covered under your homeowners insurance policy. You may also contact us online by clicking here.

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Understanding Coinsurance

by Posted in Homeowners Insurance, Investor Insuance Tagged , , Leave a comment

One way clients try to lower their property insurance premiums is to buy coverage for less than 100 percent of the value of the property. Within certain limits, this can be effective, though you need to remember that when you buy less coverage than your property is worth, you accept financial responsibility for the remaining value. You also need to know that property insurance policies contain a coinsurance clause, and if you violate it, you could receive a lot less money than you’re expecting if you have a claim.

What is coinsurance?

In the property insurance market, coinsurance refers to the percentage of the property’s total value that a policyholder is required to insure.  Coinsurance requirements differ among insurers, but the typical amount is 80 percent, sometimes rising to as much as 90 or 100 percent. That means if your property is worth 500,000 and your coinsurance requirement is 80 percent, your property should be insured for no less than $400,000.

The purpose of coinsurance is to make sure property owners purchase enough coverage to protect their property investment. If you don’t insure your property for the correct amount and have a loss, even a partial loss, you will get less for your claim than you were expecting, making it more difficult for you to rebuild after a loss. This is why it’s important that you don’t violate the coinsurance clause of your policy.

Do the math

Here’s what happens if you violate your coinsurance clause. Let’s say you have a property worth one million dollars. If you have a coinsurance clause of 80 percent, your property should be insured for no less than $800,000 to avoid violating your coinsurance clause. If you purchase coverage lower than that, say $500,000 for example, all claim payouts will be reduced by a formula for settling losses. Here’s a scenario:

The above-mentioned property is damaged by fire, sustaining losses of $100,000. In determining how much to pay you for your claim, the insurance company will look to see if you have met your coinsurance clause responsibility. If you haven’t, they will take what you insured your property for ($500,000) and divide it by the amount you should have insured it for under the coinsurance clause of your policy ($800,000). They take that number (.625) and multiply it by the amount of your loss ($100,000) to arrive at the amount they will reimburse you for your claim. Like this:

$500,000 ÷ $800,000 x $100,000 = $62,500.

In this case, you would receive $62,500 (minus your deductible), rather than the full $100,000 amount of the loss. You’re being penalized $37,500 for violating your coinsurance clause.

We understand that coinsurance can be confusing, so please feel free to ask your L & M Financial Group agent any questions you have about the coinsurance clause of your property insurance policy. We’re also happy to help you review your current policy, or offer you a quote for a new policy if you need one. You may reach us by phone at 813-672-4100, or click here to email us.

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Is Your Homeowners Insurance Rate Going Up? Here’s Why

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Central Florida is a great place to live—we have great beaches, warm temperatures, and a laid-back lifestyle. We also have the second highest average homeowners insurance premiums in the U.S., and our rates are most likely about to go up again.

5 Factors for Why Homeowners Insurance Rates are Going Up

Even though Florida homeowners rates are higher than average, they have been stable, or even going down slightly, for the past 10 to 15 years. Insurance companies have not been increasing their premiums at a rate that matches the reality of the Florida homeowners insurance marketplace, and we are now seeing some big rate increases on the horizon. Here are five factors that have contributed to this situation:

Insurance companies have paid out billions in claims and litigation

Despite nearly 15 years of low hurricane activity, in the past couple of years, Florida has been seriously impacted by hurricanes. Hurricane Irma cost insurers $11 billion in claims, and Hurricane Michael cost $7 billion. Insurers are also seeing something called “loss creep,” which means that the loss estimates are increasing considerably over what the insurance companies predicted they would be, not because of poor planning, but because of a rise in lawsuits (see below).

In addition to hurricanes and loss creep, water damage losses and roof replacement fraud have also increased insurance companies’ cost of doing business in Florida.

Potential Demotech downgrades

Demotech rates the financial stability of more than 40 Florida homeowners insurance companies. They recently announced they plan to downgrade a number of these companies if the companies don’t take steps to become more financially stable. One of the recommendations is that carriers raise their rates to an “actuarially sound” level. (Read more about what this downgrade means here.)

Reinsurance costs are rising

Simply put, reinsurance is insurance for insurance companies. When catastrophic losses occur, reinsurance helps insurance companies cover those losses. Like it or not, the worldwide reinsurance market has been affected by disasters all over the globe—not only hurricanes, but also such catastrophes as the recent California and Australian wildfires.

Some reinsurance companies have pulled out of Florida, while others are asking for substantial rate increases. Reinsurance rates are expected to rise by 15 to 20 percent at the June renewal period, and insurance companies, who operate on razor thin margins, are forced to pass this expense on to their policyholders or face going out of business altogether.

Lawsuits have increased

Insurance companies are spending increasingly more money defending themselves against lawsuits. In addition to the expense of assignment of benefits litigation, one homeowners carrier noted that the percentage of claims represented by an attorney has risen from four percent to 36 percent, and another company reported a 727 percent increase in lawsuits.

Legislation recently passed that should help curb assignment of benefits lawsuits, but another aspect of the legal system is still causing insurance companies’ legal costs to rise. Under current law, attorneys can earn up to three times their hourly rate for a basic insurance lawsuit. This was originally intended to help consumers who couldn’t afford to sue an insurance company. However, now some attorneys are using it as an excuse to collect large fees, and many lawsuits are frivolous or fraudulent. Insurance companies who don’t want to risk losing in court wind up settling out of court. Even if they do so, it costs them much more than paying a claim to an individual not represented by a lawyer.

The homeowners market is hardening

More and more companies are pulling out of the Florida homeowners insurance market or tightening their underwriting rules, making it harder for consumers to get insurance at all. As rates rise and coverage options shrink, the market is said to be hardening. That’s what appears to be happening right now.

At L & M Insurance Group, we understand that this may be a challenging time for Florida homeowners. As an independent agency, we remain committed to finding you the best coverage at the most affordable rates. We represent dozens of financially sound insurance companies, not just one. We pride ourselves on offering personalized service to all our clients. Review your homeowners policy when it comes up for renewal, and give us a call at 813-672-4100 if you have any questions, or if you’d like us to compare rates for you. If you prefer, contact us via email by clicking here.