The Cost of Homeowners Insurance in Florida Is Already Going Up for 2021
In Florida, home insurance companies have begun to file rate increases for 2021. Allstate, for example, intends to raise its rates by 13.8 percent in the coming year. The record-breaking hurricane season that hit the state last year may mean that many homeowners will see higher rates as rate changes trickle in throughout 2021.
Home insurance rates in Florida were already rising. Since 2016, the average cost of homeowners insurance in Florida has increased by 32.5 percent. In comparison, the cost of coverage increased by an average of 10.9 percent across the country during the same time period.
Home insurance rate increases in Florida
Allstate and Chubb have already been approved by the state's insurance commissioner to raise their rates for 2021. Allstate's rates will rise by 13.8 percent next year, while Chubb's will rise by 1.1 percent. Between 2015 and 2019, these companies had an average loss ratio — the percentage of claims paid to premiums collected — of only 64%. This is far less than 100%, which would imply that an insurer paid out as much in claims as it received in premiums.
Despite not losing money on claims settlements over the last five years, Allstate and Chubb both raised their prices. This, combined with the number of Atlantic hurricanes that will affect Floridians in 2020, does not bode well for future increases at other companies in the state, particularly FedNat and UPC, which had loss ratios of more than 90% from 2015 to 2019.
In Florida, the cost of homeowners insurance at Security First has increased by more than 183 percent since 2016 — five times the state's average rate increase.
Insurer | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | Cumulative Rate Change % |
Security First | 10.9% | 20.0% | 0.0% | 20.5% | 76.6% | 0.0% | 183.2% |
Heritage | 9.5% | 9.8% | 13.8% | 13.9% | 14.6% | 0.0% | 78.4% |
UPC | -0.3% | 6.8% | 5.9% | 12.7% | 36.5% | 0.0% | 73.4% |
Allstate | 8.2% | 11.2% | 5.8% | 1.8% | 0.0% | 13.8% | 47.5% |
Florida Peninsula | -2.5% | 9.7% | 5.8% | 8.0% | 16.0% | 0.0% | 41.7% |
Tower Hill | 5.5% | 6.1% | 3.2% | 1.5% | 19.2% | 0.0% | 39.7% |
FedNat Insurance Company | 4.6% | 9.7% | 0.0% | 3.5% | 9.6% | 0.0% | 30.2% |
Universal Property & Casualty | 0.0% | 0.0% | 5.8% | 4.7% | 12.6% | 0.0% | 24.6% |
Chubb | 0.0% | 0.0% | 3.9% | 5.1% | 8.0% | 1.1% | 19.2% |
Nationwide | 3.7% | 0.0% | 5.9% | 2.0% | 0.0% | 0.0% | 12.0% |
Progressive | 1.4% | 0.0% | 4.0% | 1.8% | 3.4% | 0.0% | 10.9% |
Liberty Mutual | 2.0% | 4.8% | 0.9% | 0.9% | 0.0% | 0.0% | 8.9% |
American Family | 0.0% | 0.7% | 0.0% | 0.3% | 1.6% | 0.0% | 2.6% |
Farmers | 0.0% | 0.0% | 0.0% | 0.0% | 0.9% | 0.0% | 0.9% |
USAA | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
Travelers | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
State Farm | -5.3% | -1.1% | 0.0% | -15.4% | 0.0% | 0.0% | -20.8% |
Average rate increase | 2.2% | 4.6% | 3.2% | 3.6% | 11.7% | 0.9% | 32.5% |
Universal P&C, the state's largest home insurer by written premiums, has raised its rates by 24.6 percent since 2016. State Farm, Florida's second-largest insurance provider, actually reduced its rates by 20.8 percent during the same period. As a result, State Farm was the only insurer to lower its overall rates.
How Florida's homeowners insurance rates compare to other states
Since 2016, the average cost of home insurance in Florida has increased by 32.5 percent. This is more than three times the average rate change experienced by the rest of the country during this time period (10.9 percent ).
Homeowners insurance rates have risen by 10.9 percent on average among the country's largest providers since 2016, but they have risen much more sharply in Florida. Following Florida, there were six states where the ten largest insurance companies increased their home insurance rates by at least 20%.
These rate increases could be attributed to an increase in the frequency of natural disasters, such as wildfires in California and Colorado, and hurricanes in Georgia. In fact, according to LowCostInsurance findings from an earlier study, many of the states with the highest rate increases also had the highest per-household expenses for property damage after disasters.
Only in two states, Hawaii and Alaska, did the largest insurance providers see a decrease in rates.
Rank | State | Cumulative rate increase |
-- | National average | 10.9% |
1 | Florida | 34.5% |
2 | Nebraska | 27.9% |
3 | Colorado | 21.5% |
4 | California | 20.8% |
5 | Georgia | 20.4% |
6 | South Dakota | 20.4% |
7 | Rhode Island | 20.2% |
8 | Montana | 19.6% |
9 | Virginia | 18.4% |
10 | Texas | 17.5% |
11 | Maryland | 17.0% |
12 | New Mexico | 17.0% |
13 | Illinois | 15.6% |
14 | Oklahoma | 15.5% |
15 | Connecticut | 14.6% |
16 | Utah | 14.2% |
17 | Oregon | 13.2% |
18 | Missouri | 12.7% |
19 | Kansas | 12.2% |
20 | Massachusetts | 11.9% |
21 | Washington | 11.9% |
22 | Idaho | 11.7% |
23 | Delaware | 11.2% |
24 | Iowa | 11.1% |
25 | North Carolina | 10.7% |
26 | Arizona | 10.6% |
27 | Arkansas | 9.8% |
28 | Nevada | 9.6% |
29 | Mississippi | 8.1% |
30 | New York | 7.9% |
31 | Minnesota | 7.7% |
32 | New Hampshire | 7.4% |
33 | Tennessee | 7.2% |
34 | New Jersey | 6.8% |
35 | Maine | 6.2% |
36 | Alabama | 6.1% |
37 | Michigan | 6.1% |
38 | West Virginia | 5.7% |
39 | North Dakota | 5.6% |
40 | Kentucky | 5.4% |
41 | Ohio | 5.3% |
42 | Vermont | 5.0% |
43 | Pennsylvania | 4.1% |
44 | Indiana | 3.8% |
45 | District of Columbia | 2.9% |
46 | Louisiana | 2.3% |
47 | Wisconsin | 2.3% |
48 | South Carolina | 1.6% |
49 | Wyoming | 0.5% |
50 | Alaska | -1.7% |
51 | Hawaii | -2.2% |
Rate changes across 10 largest insurers by state. States are sorted by largest cumulative rate increase from 2016 to 2021
How can Floridians find cheap homeowners insurance rates?
Homeowners in Florida can still find low-cost insurance by comparing quotes from multiple companies and taking advantage of discounts.
Florida already has a relatively high cost of home insurance when compared to other states, in addition to having experienced the highest average rate increases over the last five years. Furthermore, as a result of claims paid to homes damaged by this summer's storms, the state's insurance prices will most likely continue to rise in 2021.
Because the cost of coverage varies depending on one's location, personal history, desired coverage limits, and the company offering quotes, LowCostInsurance recommends that shoppers compare rates from multiple homeowners insurance providers in order to find the best rate.
It is also critical for property owners to reevaluate their homeowners insurance on an annual basis. Because each company's costs rise at a different rate, the cheapest option one year may no longer be the cheapest option the following year. Policyholders may also discover that their home is worth less than it was when they bought their homeowners insurance. While this could be due to natural depreciation or deliberate downsizing, the policyholder risks paying for more coverage than they require.
Methodology
Using S&P's RateWatch tool, LowCostInsurance calculated the rate increases in the U.S. homeowners insurance marketplace. We calculated average rate changes across the country based on the top ten insurance providers in each state. In Florida, we collected rates from every provider in S&P's database.