June 23, 2024

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Florida’s insurance crisis poses yet another obstacle for homebuyers there

2 min read

Florida’s insurance crisis is threatening the closing of Gernelle Bokuniewicz’s clients for their dream retirement home in Winter Park, Fla.

Frustration began to brew when her client received a premium quote of $17,000 a year for homeowner’s insurance, even though the current owner is paying just $5,000 for the same coverage. Things got worse when the insurance company retracted its quote, citing the high risk associated with the property, leaving Bokuniewicz’s clients scrambling for another insurer before the deal dies.

“I’ve run into issues before but nothing like this where I couldn’t find any insurance for home,” Bokuniewicz, the founder of Lively Real Estate, told Yahoo Finance. “It’s pretty scary if there is nobody to provide insurance.”

That’s becoming a bigger reality — and problem — for Florida homebuyers who typically must obtain homeowner’s insurance as a condition of a mortgage. But as multiple insurers pull out of the state altogether due to rising costs, that’s getting harder to do at a reasonable price and as mortgage costs in general rise.

Read more: Types of mortgage loans: Buying a house in 2023

“[Homeowners insurance] has outrageous prices and trying to get coverage is a problem,” Bokuniewicz said.

HOLLYWOOD, FLORIDA - OCTOBER 27:  A 'For Sale' sign is posted in front of a single family home on October 27, 2022 in Hollywood, Florida. The rate on the average 30-year fixed mortgage hit 7.08%, up from 6.94% the week prior, according to Freddie Mac. Mortgage rates surpassed 7% for the first time since April 2002. (Photo by Joe Raedle/Getty Images)

A for-sale sign is posted in front of a single family home on Oct. 27, 2022, in Hollywood, Fla. (Photo by Joe Raedle/Getty Images)

‘Quite a significant change in price’

Floridians already pay the highest home insurance premium in the nation at an average of $6,000 a year in 2023, a year-over-year increase of 42% and 3.5 times higher than the US average of $1,700.

“If you were to go back to 2019, our average premium in this office was about $900 for a home,” David Pojero, insurance agency owner based in Debary, Fla., told Yahoo Finance. “It’s $2,400 today.”

“It’s quite a significant change in price,” Pojero added.

Florida’s insurance crisis can be attributed to the increase in reinsurance and litigation fees. Companies that cannot afford…



2023-10-29 12:01:48

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