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South Florida is a beautiful place – but it can be a dangerous place, too, during hurricane season.  Insurance claims were especially high after Hurricane Andrew hit here in the Miami area, and many private insurance companies simply refused to cover Florida home owners after that big hit to their pocketbooks.   The result was the creation of a non-profit, tax-exempt government insurance company here in Florida named Citizens Property Insurance Corporation.  If you owned a home in Florida and couldn’t get coverage elsewhere, you could get a policy from Citizens.

These days, however, things are getting complicated.  Citizens is busy, very busy, doing reinspections of its insured properties. Citizens is also reviewing its list of exemptions so it can cut back on what it will cover in its homeowner’s policies.   Both of these tactics may make good business sense to Citizens’ Powers that Be, but it is far from good news to Florida home owners, Florida renters, and those trying to defend against foreclosure through short sales.  It also doesn’t bode well for those Florida home owners fighting to stay in a home with an underwater mortgage.

Of course, Citizens is arguing that this is something that must be done as Florida’s “insurer of last resort” because today, Citizens Property Insurance Corporation is the biggest insurance company in the State of Florida.   Being the elephant in the room, though, also means that whatever Citizens does will impact other Florida insurance companies as well as Florida home owners and others impacted by the Florida housing industry.

Which means that Florida home owners are seeing huge increases in premiums – increases amounting to thousands of dollars in annual coverage.   It’s becoming such a huge problem that now there’s talk that it will be a big campaign issue this fall.   However, the bottom line remains that Citizens is acting within its legally permitted operations to do things like re-inspect insured properties and until the Florida Legislature steps in, Citizens will probably keep taking action to boost its bottom line.

Larry Tolchinsky’s Tip:

Here in South Florida, odds are high that anyone dealing with the buying, selling, or renting of a Florida home or Florida condo will be dealing with Citizens as the home insurance carrier.   When Citizens raises its insurance premiums, it’s not just a trickle effect here: in some ways, it’s a hurricane of its own, financially speaking.

Skyrocketing home insurance premiums impact many, many things.  Among them:

  • Real estate brokers and agents along with builders of custom homes and condo towers are detrimentally impacted by this increase since higher costs of home ownership means less people want, or can afford, to buy a home.
  • Underwater mortgage home owners who have been treading water in Florida’s housing market are seeing  a big jump in their monthly insurance premium payment as the last straw, forcing them to opt for foreclosure.
  • Short sales are falling apart and not closing because the insurance premium to cover the property either discourages buyers from making offers or causes buyers to dump the deal.
  • Tenants, many of them former home owners who have been foreclosed upon, are facing higher rents as owners and landlords are forced to pass on the higher insurance costs to their renters.

Even worse, some people may face losing their home because of big jumps in their insurance premiums. People like the retired librarian spotlighted in the Miami Herald, who must figure out how to budget her fixed income to cover an increase in her home insurance premium from Citizens that has gone from $4,882 to $7,028.

What can be done to fight this?

Well, discussing things with your Florida representative up in Tallahassee couldn’t hurt as well as making your voice heard in the Governor’s office. Others are going to the courts: over in Pasco County, some homeowners have filed a lawsuit that claims the premiums are too high because the software that is being used to calculate replacement costs by Citizens is flawed and fraudulent. Another lawsuit: homeowners suing Citizens arguing that the inspections are just an illegal scheme to get more money.

Florida home owners do not have to sit back and do nothing if they are Citizens customers: there may be legal avenues available to everyone impacted by these skyrocketing rates. If you own a Citizens policy, then consult a Florida real estate lawyer about your options. If you are a buyer or renter that is dealing with the indirect impact of Citizens’ coverage, then you may have legal options as well which a Florida attorney can help you investigate.

Unlike Florida insurance coverage, most Florida real estate lawyers these days – like our law firm – are finding ways to help those who are hurting in this tight economy. Don’t procrastinate or ignore the possibility of legal redress because you assume that legal fees are too high and lawyers cost too much. You may be very surprised.

Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at or (954) 458-8655.

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