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I’ve Never Had a Claim—Why Does My Insurance Keep Going Up?

by Posted in Auto Insurance, Homeowners Insurance, News Tagged , , , , ,

This is a common complaint among our customers who find their home and auto insurance rates continue to rise, even when they haven’t had any claims. We know this can be frustrating and we always do our best to find the most competitive insurance rates, no matter what type of insurance our clients need.

As we’ve noted before, the Florida insurance marketplace has some unique challenges, but the cost of insurance is rising in most states. Insurance companies look at many factors when they set their rates, only some of which you can influence—like keeping your driving record clean or improving your credit score. But there are some things which are beyond both your control and your insurance company’s control, factors which are at work in the industry at large. Here are a few things which affect the price of your insurance—even if you, personally, don’t have a claim.

Insurance is a “pool of risk”

First, understand that the central function of insurance is the sharing or pooling of risk. In return for a premium, the insurer agrees to pay for the covered losses of its policyholders. As the Insurance Information Institute (iii.org) rather poetically explains, “If risks—chances of loss—can be divided among many members of a group, then they need fall but lightly on any single member of the group. Thus misfortunes that could be crushing to one can be made bearable for all.”

Insurance protects against catastrophic loss, and in that role it helps to keep society functioning. We couldn’t get credit to buy a house or car, or to start a business if creditors couldn’t have some guarantee of being paid back in the event of a loss. A family who loses a home and all their belongings in a fire would be devastated without an insurance policy. A small business owner could lose everything if someone sued them after slipping and falling at their business. Insurance helps protect us all from financial ruin.

Claims have become more frequent

So remembering that insurance is a pool of risk, if claims become more expensive or more frequent, everyone in the pool will be affected. Simply put, you may not have made a claim, but plenty of other people have. According to Climate.gov, “In 2021, the U.S. experienced 20 separate billion-dollar weather and climate disasters, putting 2021 in second place for the most disasters in a calendar year, behind the record 22 separate billion-dollar events in 2020.” These events include wildfires, tornadoes, floods, and, of course, hurricanes. Plus, those claims numbers don’t include the more mundane events that take place every day—the fender benders, the burst pipes, and so on.

The cost of everything is increasing

This includes the costs to rebuild or repair homes and vehicles in the event of a loss. Home renovations, demand for new construction, and supply chain issues have limited the availability of construction supplies and materials, inflating prices. Auto claims costs are also rising because of similar factors.

Another significant expense for insurance companies is the rising cost of reinsurance (insurance for insurance companies).

Because of these factors, the cost of doing business has insurance companies scrambling. In order to stay in business themselves, they pass on these increased expenses to policyholders.

L & M Insurance Group—your independent agency

Despite the cost, buying appropriate insurance is still one of the best ways you can protect your assets. If you want to be sure you’re paying the most competitive rate for your insurance, why not call a local, independent agency like L & M Insurance Group? Our agents are well-versed in the Florida insurance marketplace and will be happy to answer your questions and give you a quote. We handle personal lines, such as homeowners and auto, as well as business insurance, health, and life insurance. Please call (813) 672-4100, or click here to contact us online. Let us help you find the best insurance coverage at the most competitive price.

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New Homeowners Insurance Legislation—Will It Bring Your Premiums Down?

by Posted in Homeowners Insurance, News Tagged , ,

If you own a home in Florida, you know that homeowners insurance premiums are skyrocketing, and it’s getting harder for some to even find homeowners insurance. In 2022 alone, six Florida homeowners companies became insolvent, leaving thousands of consumers scrambling for coverage. Many insurance companies are cancelling or non-renewing policies, as well as tightening underwriting requirements. Florida property insurance companies have recorded underwriting losses of more than 1 billion dollars for the past two years, and many are fleeing the state or raising premiums as much as they are allowed to by the Florida Office of Insurance Regulation.

And while hurricanes and other covered perils contributed to their losses, insurance experts note that lawsuits and assignment of benefits abuse have been the main reasons for underwriting losses.

In December 2022, Florida lawmakers met in a special session to address the crisis in the homeowners insurance market. They passed Senate Bill 2A (SB 2A) which was signed into law by the governor on Dec. 16.

SB 2A provisions

While there are still many issues to address, we hope this bill will help stabilize the homeowners insurance market in Florida, stop the steep rise in premiums, and keep homeowners insurance available to everyone. Here are a few of the main provisions of SB 2A:

  • Creates a state-backed reinsurance fund to offer reinsurance (insurance for insurance companies) at lower rates to insurers struggling with the cost. Reinsurance prices have risen significantly, and experts expect them to continue to go up in 2023.
  • Eliminates one-way attorney fee provisions. In the past, property insurers were responsible for paying the attorney fees of policyholders who sue them over a claim and win. Now, each party will pay for their own attorney fees.
  • Prohibits the assignment of benefits for both residential property and commercial property claims. Assignment of benefits is an agreement that gives a third party, such as a contractor, authority to do such things as file claims and collect insurance payments, without the involvement of the homeowner. Originally intended to streamline the claims process, assignment of benefits has become a vehicle for abuse and fraud.
  • Attempts to return Citizens Property Insurance Corporation to the status of insurer of last resort by requiring policyholders to accept renewal or take-out offers from an authorized company that is within 20 percent of the policyholder’s Citizens insurance premium.
  • Requires those with Citizens policies to purchase flood insurance.

The bill also contains provisions to encourage insurance companies to pay claims promptly, including requiring them to begin an investigation of a claim within seven days, and reducing the time for them to pay or deny a claim from 90 to 60 days.

Will homeowners insurance premiums come down?

The question everyone wants to know the answer to! Unfortunately, we won’t see the price of homeowners insurance come down right away, though it’s possible we might see decreases in a year to 18 months’ time. It will take time to see the results of the changes taking effect. State regulators and lawmakers say they will continue to monitor the situation and have requested data from the insurance companies about litigation and other factors which contribute to insurance company insolvencies.

Your partners at L & M Insurance Group

The insurance professionals at L & M Insurance Group are experts in navigating the Florida homeowners insurance market. If you receive a cancellation or non-renewal notice for your homeowners policy, or your renewal offer goes up drastically, we can help. Give us a call at 813-671-4200, (or click here to contact us online) and one of our agents will help you review your homeowners insurance options. L & M Insurance Group is a locally owned, independent insurance agency. We’ve served Riverview, Tampa, Brandon, Valrico, and surrounding communities for more than 30 years.

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How Your Credit Affects Your Insurance Premiums

by Posted in Auto Insurance, Homeowners Insurance, Uncategorized Tagged , , , , , ,

As you’re shopping for home or auto insurance, you might come across the concept of the credit-based insurance score, or simply the insurance score. Hmm, that’s odd. What does credit have to do with insurance risk, and how does it affect the cost of your insurance? Does having good or bad credit affect your insurance policy premiums?

Your Credit Score may affect the Price of your Insurance

Your credit score may be affecting how much you pay for insurance. Most homeowners and auto insurance companies in Florida use credit-based insurance scores as part of the process of setting their insurance rates.

Read on for the answers to five commonly asked questions about credit scores and insurance.

1. What’s the difference between credit score and insurance score?

Credit-based insurance scores (or insurance scores) are ratings based on your consumer credit information. They use much of the same information to provide a rating as credit scores do—payment history, outstanding debt, pursuit of new credit, credit mix—but they are used to predict insurance losses. As with credit scores, the higher your insurance score the better, because, according to the Insurance Information Institute (iii.org), “Insurance claims tend to decline as credit scores improve.”

2. Why do insurance companies use credit information to rate premiums?

Insurance scores were developed in the 1990s to help insurance companies more accurately underwrite and price insurance policies. Though they are not the only measure used to rate a policy (see below), the industry has determined that “…people who have low insurance scores, as a group, account for a high proportion of the dollars paid out in claims.” (Source: iii.org.) Experts speculate that the connection is behavioral—those who manage their money and credit well tend to manage other areas of their lives, such as maintaining their homes and vehicles, in a responsible way, which reduces risk.

Also according to iii.org, when insurance companies use credit-based insurance scores, many people (more than 50%) see lower insurance rates overall because insurance companies are able to price coverage that reflects risks more accurately.

3. Does it hurt my credit rating when an insurance company asks for my credit info? No. When an insurance company requests information about your credit, it’s not considered a “hard credit pull.” Hard credit inquiries result when you apply for a loan, mortgage, or credit card.

4. What other information is used to determine home and auto insurance premiums?

In addition to insurance scores, for auto coverage, insurance companies will use some combination of your geographical area, model of vehicle, accident history, age of drivers, driving records, insurance claims, and sometimes how many miles you drive in a year. For homeowners insurance, they will consider things like the home’s age and construction, cost to rebuild the structure in case of a total loss, location, proximity to water for firefighting, and flood risk.

5. How can I improve my credit/insurance score?

This is a great question since people with higher insurance scores usually pay somewhat less for their insurance. First, check your credit score yearly. By law, you’re entitled to one free credit report each year from the national credit reporting companies Equifax, Experian, and TransUnion. Read over your report and correct any errors that might be bringing your score down.

The best thing you can do to improve your credit score is to make your payments on time, including bills, taxes, and any fines or fees you need to pay. It also helps to pay off your credit card balances or keep them as low as possible. If you need to apply for a new credit card or loan, try to wait six months or so between applications—applying for too much credit at one time can temporarily lower your credit score.

Remember, if you do improve your credit score, make sure you compare insurance rates at renewal time. Don’t just assume your insurance premium will decrease.

Shop your insurance with an independent agency

Whether you have good credit or bad credit, L & M Insurance Group can help you find auto and home insurance coverage at the most affordable price. Because we are an independent agency, we write with many different insurance carriers and have more options to choose from than a captive agency. Let our agents shop for your best insurance deal—call us at 813-672-4100, or click here to contact us online.

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Insurance 101: Understanding Your Deductibles

by Posted in Auto Insurance, Homeowners Insurance Tagged , , ,

The high cost of home and auto insurance in Florida has us all thinking about ways to save money on policy premiums. While many factors are beyond your control, one that may help save money is your policy deductible. Generally, a higher deductible means lower premiums. A lower deductible means your premiums will be higher. You’ll have to decide which makes better financial sense for your situation.

Let’s talk about what a deductible is, and how it works with your home and auto insurance.

What is a deductible?

A deductible is the amount of money you’ll pay out of pocket before your insurance takes over when you have a claim. When you have an insured loss, the deductible is subtracted (or “deducted”) from the amount of money your insurance company will pay to settle your claim. If you have a loss that doesn’t reach the amount of your deductible, you won’t be able to make a claim.

In home and auto insurance, there are two types of deductibles:

  1. A flat dollar amount. A $500 deductible on the comp/collision coverage of your auto policy is an example of this type of deductible.
  2. A percentage-based amount. This type of deductible is usually found on a homeowners policy. The percentage is calculated based on the home’s insured value. For example, you have a two percent deductible, and your home is insured for $500,000. If your home is destroyed, your deductible would be $10,000.

In hurricane-prone states such as Florida, a special hurricane deductible also applies only to damage and claims from storms categorized as hurricanes by the National Weather Service. Homeowners insurance companies decide on what will “trigger” the hurricane deductible—usually when the National Weather Service officially names a storm or declares a hurricane watch or warning. A hurricane deductible is usually between one and five percent of your home’s insured value.

With auto and homeowners insurance, your deductible applies each time you make a claim. An exception might be your hurricane deductible, which may only apply once per hurricane season. Check your insurance policy for details.

Insurance is intended to help you financially in the event of a loss that is too big for you to handle by yourself. It’s important to note that making frequent claims on your homeowners or car insurance will not only result in higher premiums—it may also get your policy cancelled or non-renewed.

What to consider before raising your deductible

While it’s tempting to raise your deductible to save money on your insurance, remember that you’ll be paying more out of pocket if you have a claim. Will you be able to make necessary repairs with a higher deductible? If you do raise your deductible, consider setting aside money to cover it if you have a loss.

Do you need home or auto insurance?

Helping you with your insurance needs, including helping you decide what deductible is right for you, is just what L & M Insurance Group is here for. L & M Insurance Group is a locally owned, independent insurance agency serving Tampa, Brandon, Riverview, Valrico, and surrounding communities. If you need a home or auto insurance policy, call (813) 672-4100 to speak to an agent, or contact us online.

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Water Damage: What Your Homeowners Insurance Will—and WON’T—Cover

by Posted in Homeowners Insurance Tagged , ,

When you buy a homeowners insurance policy, you’re purchasing protection for your family’s safe haven as well as your most valuable asset. A homeowners policy is intended to help you recover from a sudden and accidental loss, likely an expensive one, such as fire, lightning, hail, etc. However, we find that coverage for one peril, water, is sometimes misunderstood.

Water damage is the second most common reason a homeowner will make an insurance claim, and it is often covered. However, that depends on what caused the damage in the first place. The key is in the concept of the damage being “sudden and accidental.” For example, if a pipe bursts or an appliance overflows, flooding your home and damaging it—those things are both sudden and accidental. However, gradual damage, like that which occurs over time from a leaking faucet, would likely not be covered. Homeowners insurance will not cover water damage due to negligence or lack of maintenance. It’s not intended to serve as a vehicle for maintaining your home.

In addition, your homeowners insurance will NOT cover water damage due to:

  • Intentional acts.
  • Sewer or drain backup (unless you’ve purchased that coverage).
  • Leaks from a swimming pool or other structure.
  • Ground water seepage.

What about flood damage?

A major concern in Florida is flood damage. Flooding is not covered under a standard homeowners policy. This includes flooding from a hurricane, rising water from overflowing rivers, storm surge, or water from heavy rains. If you need flood coverage, L & M Insurance Group can help you get the coverage you need.

Tips to prevent water damage

The best way to prevent water damage is to keep your home in good repair. Here are a few simple things you can do to prevent water damage (see “Fall Maintenance for Your Florida Home” for more suggestions):

  • Inspect dishwasher, water heater, and washing machine hoses and replace if necessary.
  • Turn off water supply to washing machine and refrigerator when going out of town.
  • Monitor your water bill for unexpected increases.
  • Install a leak detector/leak sensor, a device which detects and notifies you about leaks.

L & M Insurance Group—your source for homeowners insurance

If you have questions about what is or is not covered under your Florida homeowners insurance policy, don’t hesitate to call your insurance agent. And if you need a quote for homeowners insurance, please consider giving L & M Insurance Group a call. We understand the importance of finding the right homeowners insurance coverage for your needs. We are an independent insurance agency partnered with many great homeowners insurance companies, and we’d love to help you find the most cost-effective coverage for your individual situation. Please give us a call at 813-672-4100 or click here to contact us online.

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Safe Grilling Tips for National Grilling Month

by Posted in Homeowners Insurance Tagged , , ,

Ah, the smell of backyard barbecue—one of the best aromas of summer! July is National Grilling Month, and the height of “grilling season” across the US. And while most people go their whole lifetimes without an incident, July is also peak month for grill fires, resulting in thousands of injuries and millions of dollars of property damage each year. While fire is a covered peril under your homeowner’s insurance, no one wants to deal with the trauma and hassle of coping with a house fire.

So before you fire up that grill, protect your property and loved ones with these key grilling safety tips.

Grilling safety tips

Always operate your propane or charcoal grill outdoors in a well-ventilated area. In addition to posing a fire risk, grills produce deadly carbon monoxide fumes—so never use your grill inside your house or garage.

Position your grill well away from your home, garage, deck railings, overhanging branches, or shrubs. Make sure it’s on a flat and level surface so that it won’t tip over or roll. Don’t move the grill once it’s lit.

Keep children and pets at least three feet away from the grill, and never leave it unattended. Make sure matches and lighters are not where children can reach them.

Keep your distance from the heat and flames by using long-handled tools when grilling.

Keep a fire extinguisher handy in case of a grill fire. Grill fires are basically the same as grease fires, so using water won’t work and can be dangerous. If you don’t have a fire extinguisher, you can try smothering the flames by closing the lid and grill vents to cut off oxygen to the fire. If you can do so safely, you may also pour baking soda on the flames.

If there’s any danger of the fire spreading to your home (or a neighbor’s), call the fire department immediately. House fires can spread rapidly.

If you have a gas/propane grill:

Before you grill for the first time this season, or if you haven’t already done so, check that tank hoses are in good condition with no leaks or blockages. Apply a 50/50 soap and water solution, and if you see bubbles, there’s a leak. Turn off the propane, and have the tank serviced professionally. You can use a pipe cleaner or wire to clear any blockages.

Make sure the lid is open when lighting the grill. If the lid is closed, gas can build up and cause a fireball.

Don’t lean over the grill as you light it.

If a burner won’t light or goes out after lighting, turn off the grill and wait at least five minutes before trying again.

Remember to turn off the gas when you’re done grilling!

Note: if you can still smell gas after you turn off the grill, call the fire department.

If you have a charcoal grill:

If you use starter fluid to light your coals, only use fluid specifically made for grilling. Once you’ve lighted the charcoal, do not add more lighter fluid. You might also want to try an alternate method for lighting charcoal, such as a charcoal chimney starter that uses newspaper as fuel.

Once you’re done cooking, close the air vents to let the coals begin to cool. Let coals cool completely before disposing of them in a metal container.

After you grill

Keep your grill clean. Not only will you avoid potential fire hazards, the food you cook will taste better! Scrape down grill grates and clean drip trays. Keep your grill covered to protect it from dirt, insects, and moisture.

Always store propane tanks outside and away from your house.

Maintain your grill, use it safely, and know what to do in an emergency, and you’ll be able to enjoy some good times and good food while grilling this summer. Let us know what time to come over—we’ll bring the potato salad!

Protect your home from fire as well as other perils by buying the right homeowners insurance for your situation. The agents at L & M Insurance Group will help you navigate the confusing Florida homeowners insurance market. Please call us at 813-672-4100 or email us for a free homeowners insurance quote. L & M Insurance Group is a full-service, independent insurance agency.

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AOB Abuse and Fraud Help to Drive the High Cost of Insurance

by Posted in Auto Insurance, Homeowners Insurance, News Tagged , , ,

If you’ve purchased or renewed homeowners insurance lately, you know that premiums are skyrocketing. While there are several factors driving Florida’s insurance crisis, our high insurance prices are, in part, due to fraud and assignment of benefits abuse.

Let’s take a closer look at what’s happening.

What is Assignment of Benefits (AOB)?

Assignment of benefits (AOB) is a legal agreement between a policyholder and a third party in which the policyholder gives (“assigns”) some of his or her rights and benefits under the policy to that third party. Under certain circumstances, this works well, such as when preapproved health care service providers bill your health insurance company directly for covered benefits. However, in the world of homeowners (and auto insurance), AOB abuse has become rampant, adding more strain to an already stressed insurance market. Most AOB abuse claims stem from homeowners insurance (primarily related to roofing scams or water losses), PIP claims, and damaged windshields. This article will address AOB abuse related to homeowners insurance claims.

What does AOB abuse entail?

In Florida, two things are at play. First, unscrupulous companies are submitting inflated or fraudulent homeowners insurance claims. One common scenario involves roofing companies canvassing a neighborhood after a storm, offering “free roof replacement” after they look for damage that may or may not exist or be caused by that storm. In this and other situations, fraudulent contractors also may do unnecessary repairs, overcharge for repairs, or in some cases, charge for repairs they don’t make.

Second, when an insurance company balks at paying an inflated claim, the fraudulent contractors are hiring attorneys to file excessive lawsuits alleging breach of contract or bad faith. In some cases, lawsuits have been filed even before the insurance company has been notified of the claim!

As we noted in a previous article, “Florida has, by far, the largest number of lawsuits related to homeowners insurance claims. For instance, in 2019, only 8.15 percent of all homeowners claims in the U.S. were filed in Florida, but more than 76 percent of property claim lawsuits were filed here. And what’s worse: only eight percent of the fifteen billion dollars that property insurance companies paid out in claims costs between 2013 and 2020 went to consumers. Seventy-one percent went to attorneys!”

Of course, not every claim is inflated, nor is every lawsuit unwarranted. But Florida currently has an environment of abuse.

AOB abuse “acts like a tax”

Put plainly, even if you’ve never had an insurance claim, AOB abuse and fraud are costing you money. Insurance companies have no choice but to pass legal costs to defend AOB lawsuits as well as the costs of inflated claims to all insurance consumers. According to the Insurance Information Institute (iii.org), “…had legal costs tracked nationwide averages, the cumulative total savings for Florida homeowners insurers (and their policyholders) would have been nearly $1.6 billion.” This statistic only refers to legal costs themselves, not the amount of money paid out in inflated claims settlements. “AOB abuse acts like a tax on Florida consumers,” according to iii.org.

If you have a claim

If you have a homeowners insurance claim, contact your insurance company as soon as you can. Most have 24/7 claims service, either by phone or online. Insurance company representatives will be happy to walk you through the claims process. Don’t allow a contractor or water remediation company to contact your insurance company for you. You don’t need to sign an AOB to have your claim paid.

(For more information, see “Demolish Contractor Fraud.”)

L & M Insurance Group—your source for insurance

We hope this has helped you understand one of the major factors driving the skyrocketing costs of insurance in Florida. Please remember that reputable insurance companies, like the ones L & M Insurance Group represents, will be there for you if you have a claim. If you need a quote for personal auto, homeowners, renters, or business insurance, we partner with multiple insurance companies, and our agents are experts at finding the right match for your individual situation. Please call 813-672-4100 or click here to contact us online.

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Three Things You Should Know About Water Damage

by Posted in Flood Insurance, Homeowners Insurance, News Tagged , ,

When you think of Florida, you probably also think of water. We’re lucky to have gorgeous rivers, lakes, and the ocean practically right on our doorstep. Unfortunately, we also have the ever-present threat of water damage—whether from leaks, flooding, or sewer backup.

Florida residents file thousands of water damage claims every year. Water damage claims are second only to wind and hail claims in frequency. The high cost of water damage claims is one of the factors contributing to higher insurance premiums for everyone, and because of this, most homeowners insurance companies now put restrictions and limits on water damage coverage.

Here are three things you should know about water damage.

Water damage is expensive

The average home insurance claim for water damage is $11,098, and nationwide household water damage claims cost up to $20 billion each year. One inch of water can cause more than $25,000 worth of damage.

Water damage isn’t always covered by homeowners insurance

Water damage causes include burst pipes, leaks (either plumbing or roof), appliance failures, sewer backup, and flooding. Homeowners policies generally cover the “sudden and accidental discharge of water,” such as from a burst pipe, accidental overflow of an appliance or fixture, or water damage done in the course of putting out a fire. They won’t cover water damage caused by maintenance issues or failure to make repairs. Frequently, there is no coverage for water damage if mold is present or it is clear that the damage has been in existence for 14 days or more without being fixed. The key is that the problem must be sudden and accidental, not an ongoing maintenance/repair issue.

Sewer backup isn’t covered by most Florida homeowners policies, but you can add coverage via endorsement for a nominal amount of money.

What about water damage from flooding? Flood damage is not covered under a Florida homeowners insurance policy, regardless of the cause of the flooding. If you need flood coverage, you can buy a separate flood insurance policy.

When shopping for homeowners insurance, be sure to read your potential policy carefully, and ask your agent to explain any water damage exclusions or restrictions if you have questions.

You can help prevent water damage

There are some home maintenance tasks you should do to minimize significant water damage to your home, including:

  • Inspect your roof for missing or damaged shingles and make repairs if necessary.
  • Caulk and seal windows.
  • Inspect and maintain your plumbing system.
  • Know the location of the main water shut-off valve to your home. Being able to shut off the water quickly can minimize damage if a pipe or hose bursts.
  • Replace your traditional water heater every 10 years.
  • Shut off the water supply to your washing machine when you go out of town.
  • Don’t leave the house when the dishwasher or washing machine are running.
  • Check that gutters and downspouts are clear, and that water drains away from your foundation.
  • Install a humidity sensor in areas where a leak might occur, such as near a washing machine or dishwasher.
  • Install a wireless water valve—these monitor water flow and usage and can potentially alert you to a leak.

Let L & M Insurance Group help

If you’re in the market for a new homeowners insurance policy, you want to know that you have the appropriate coverage for your needs, including water damage coverage. We know sorting through insurance information can be confusing. That’s where we can help. Please consider independent insurance agency L & M Insurance Group for all your insurance needs, including homeowners insurance. We have many years of experience serving the communities of Tampa Bay, Riverview, Brandon, Valrico, and surrounding areas. Give us a call at 813-672-4100, or click here to contact us online.

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Florida Home and Auto Premiums Are Skyrocketing—Is There Anything You Can Do?

by Posted in Auto Insurance, Homeowners Insurance, News Tagged , , , ,

Almost every day we receive calls or emails from upset clients whose insurance premiums are going up, even when they’ve never made a claim. Some policies are going up by hundreds of dollars per year—what is happening?

The Florida insurance market is in crisis, particularly the homeowners and auto insurance sectors. A perfect storm of factors is contributing to today’s skyrocketing premiums and a market in which it’s getting harder to find insurance at all. In addition to rate increases, insurance companies are pulling out of Florida and tightening their underwriting guidelines. Florida consumers are facing insurance premium sticker shock and are finding it harder and harder to get the insurance coverage they need at a price they can afford.

Why insurance premiums are skyrocketing

As a locally-owned, independent insurance agency, L & M Insurance Group is committed to helping you find insurance that fits your needs and that you can afford. We also want to help you understand the factors contributing to this crisis. Here are the main reasons Florida insurance is seeing such steep increases:

Catastrophic losses. In 2020, Florida insurers lost nearly $1.6 billion dollars, and are reporting even greater losses in 2021. These losses mainly stem from litigation and reinsurance costs (see below), as well as continued payouts for hurricanes Irma and Michael.

Reinsurance costs. It might seem odd that wildfires in California or Australia would affect the price of insurance in Florida, but they can. That’s because disasters all over the world affect the cost of reinsurance for everyone. Reinsurance is “insurance for insurers”—a way for insurance companies to limit the extent of their own losses in case of disaster. The cost of reinsurance has been rising, and experts expect it to continue going up.

Skyrocketing construction and repair expenses. With the price of everything from car parts to lumber going up, it costs more than it did in past years to repair your vehicle or rebuild your house in case of a loss.

In addition, the value of vehicles and homes is also going up, which means in order for you to receive replacement cost in case of a loss, your insurance company will have to pay out more. It follows that if a covered item is worth more, then the cost of insuring it will be more.

Labor shortages are also affecting the price of construction, home, and auto repair. (Read more about how supply chain issues and labor shortages are affecting car insurance premiums.)

Lawsuits and fraud. For years, bad actors have exploited both policyholders and property insurers. Homeowners have been talked into filing claims and lawsuits by third parties like attorneys, contractors, or water remediation firms. Often times, homeowners don’t understand the claims process, or are relieved to have someone else take over. Unfortunately, every insurance consumer in Florida is paying the price for inflated or fraudulent claims and lawsuits.

Florida has, by far, the largest number of lawsuits related to homeowners insurance claims. For instance, in 2019, only 8.15 percent of all homeowners claims in the U.S. were filed in Florida, but more than 76 percent of property claim lawsuits were filed here. And what’s worse: only eight percent of the fifteen billion dollars that property insurance companies paid out in claims costs between 2013 and 2020 went to consumers. Seventy-one percent went to attorneys!

What can you do?

Much of what is happening in the insurance industry is out of individuals’ control, but here are three things you can do:

Review your insurance needs with an L & M Insurance Group agent. We can help you make sure you have the appropriate coverage for your situation, and that you’re taking advantage of all discounts available to you. We can also discuss whether or not an option such as switching to a higher deductible to lower your insurance premium is right for you.

If you have a claim, be sure to contact your insurance agent and/or your insurance company yourself. Do not sign anything without talking to your insurance agent or directly to your insurance company.

Contact your elected officials and tell them that continued insurance reform is still needed. Though recent legislation has helped to reduce assignment of benefits lawsuits, other types of lawsuits are still going up, at a cost to all of us.

We at L & M Insurance Group understand your worries and frustrations about the cost of home and auto insurance. We promise we will do the best we can under these difficult circumstances to provide you with the best coverage at the most cost-effective price. Please call us at 813-672-4100 if you need to discuss your insurance options. If you prefer, you may also contact us online.

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Make These Insurance Resolutions for the New Year

by Posted in Auto Insurance, Commercial Insurance, Homeowners Insurance, Life Insurance, Uncategorized Tagged , , , , ,

At the start of a new year, many people resolve to get their finances in order. L & M Insurance Group would like to remind you that appropriate insurance coverage is one of the best ways you can protect yourself from financial disaster. Insurance can protect your most valuable assets, like your home and your vehicle, protect you from lawsuits, and even care for your family after you’re gone.

Here are a few things you can resolve to do now to make sure you have the financial protection you need—for the lowest possible insurance premiums.

Review your life changes. Was 2021 was an eventful year for you? Did you experience any major life changes, such as marriage, divorce, or the birth of a child? Did you renovate your house, buy a new vehicle, turn 55, or start a business? Become an empty nester? Even if you already notified your insurance agent about these changes, now is a good time to do a more thorough review of your insurance coverage to make sure you’re properly protected.

Review your coverage. Once you’ve reviewed your personal situation, you’ll want to see how it lines up with your insurance coverage. Insurance is meant to protect your financial assets in case of accident, crime, or disaster, including providing liability protection in case someone sues you. Some common areas of concern we see frequently include:

For auto insurance, do you carry bodily injury in high enough limits? (Insurance experts recommend 100,000/300,000 for most situations, even though Florida state requirements are much lower.) Do you carry uninsured motorist (UM) coverage? (In Florida, we have many un- or under-insured drivers on the roads, so we recommend carrying UM coverage.)

For home insurance, does your policy provide replacement cost coverage? Your home should be insured for enough to rebuild, repair, or replace it and your personal possessions with comparable quality—not just for how much you owe on your mortgage or the home’s market value.

And speaking of personal possessions, did you buy or receive any expensive items in 2021—such as jewelry, art, or home electronics? High value items may need special coverage, over and above what is covered under a standard homeowners insurance policy.

Consider your life insurance needs. Do you have life insurance? Do you need it? If you do have life insurance, be sure that your policy is up to date with the correct beneficiary, and any other details that may have changed. Life insurance is surprisingly affordable, especially for younger people who are most in need of it to help safeguard their families’ futures. If you don’t have life insurance but would like to explore your options, please call 813-672-4100, or click here for an online quote.

Keep your driving record clean. Still one of the most basic things you can do to keep your auto insurance rates down!

Maintain or improve your credit record. Many insurance companies look at your credit when calculating insurance premiums. Boosting your credit record can result in cheaper insurance rates and more policy options to choose from. (Even if your credit is not great, L & M Insurance Group can still help. Give us a call at 813-672-4100.)

Work with an independent agency. Independent agencies, like L & M Insurance Group, represent multiple insurance carriers instead of just one. This means we have more flexibility to shop for the best policy and insurance company for your individual situation. We can also write just about any type of insurance you need, including personal and commercial auto, home, life, renters, and business insurance. And OUR number one new year’s resolution is to help YOU find the best insurance deal! Give us a call at 813-672-4100, or contact us online for all your insurance needs.