Tod Kiryazov Co-founder / Product | Insurify
Finding affordable insurance coverage is becoming increasingly challenging for Florida homeowners as American Mobile Insurance Exchange (AMIE) announced it is canceling mobile and manufactured home policies across the state.
Florida’s Office of Insurance Regulation is supervising AMIE’s runoff after the insurer cited $15 million in losses over three years, according to Insurance Information Institute (Triple-I) Corporate Communications Director Mark Friedlander.
Of its 9,541 policies, Friedlander said AMIE canceled about 1,100 early, negotiated with American Traditions Insurance Company for it to assume around 8,000, and let the rest expire at term’s end.
“In a consent order for public administrative supervision, American Mobile said it couldn’t maintain the required surplus and doubted its ability to secure, on ‘viable terms and pricing,’ adequate catastrophe reinsurance for the current hurricane season,” Friedlander said.
Florida is the most expensive state for home insurance in the nation. The average annual home insurance premium in Florida exceeds $10,000 for $300,000 of coverage and will reach $11,759 by the end of 2024, according to Insurify’s home insurance report.
General inflation, replacement cost inflation due to supply chain issues and labor shortages, and costly losses from natural disasters are driving rising homeowners insurance rates. “Another unfortunate factor proliferating the rising costs of insurance is legal system abuse,” said Triple-I CEO Sean Kevelighan in a July press release. “This unfortunate phenomenon is a problem that needs more attention and fixing.”
Reforms appear to be helping; rates increased about 80% less than projected in 2023. Twelve Florida insurers have filed for rate decreases in 2024, and 24 have filed for no rate change. “This is due to a reduction in legal defense expenses and a flattening of reinsurance rates,” Friedlander said. “Additionally, nine new carriers are entering the market this year and are confident they can write profitable business in Florida due to legislative changes.”
Finding and maintaining home insurance in Florida has become increasingly difficult as several factors cause significant insurer losses. Many home insurance companies have pulled coverage from higher-risk policyholders or left Florida entirely.
Insurance agents are struggling to find coverage for mobile and manufactured homes, especially those more than two years old. “One of our niches has been manufactured homes and mobile homes,” Lee County Insurance principal John Gardner told the Insurance Journal. “But now the market has absolutely fallen apart in Florida.”
Many homeowners — especially those with older homes — will have to buy coverage from Citizens Property Insurance Corp., Florida’s state-backed insurer of last resort. Though Citizens is working to reduce its number of policies by transferring them to private insurers who can manage the risk, homeowners don’t need to worry about Citizens dropping their policy altogether. However, this does not mean coverage is affordable.
Mobile home vendor Sun Homes estimates a new mobile home costs between $50,000 and $100,000. Florida’s average annual premium for $100,000 of coverage is $4,235 but Citizens’ premium is more than double at about $8,537 for the same coverage.
Friedlander pointed out some positive developments for Florida mobile homeowners: “The mobile/manufactured home insurance market in Florida continues to face challenges,” he said. “However there are new market entrants that specialize in this coverage and Citizens has become an option for these customers as well.”
Florida has a program aimed at helping owners of mobile and manufactured homes protect their property despite inherent risks. The state Division of Emergency Management’s Hurricane Loss Mitigation Program works with Gulf Coast State College on the Mobile Home Tie-Down Program which retrofits homes installed before 1999.
The program does not bring homes up to code but makes them as wind-resistant as possible given funding limitations physical characteristics conditions premises allow It can also help minimize damage from windstorms tornadoes hurricanes
The program free homeowners apply online
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