Mike Costner's home in Indian River County has withstood every hurricane to hit Florida since 1952. So he was perplexed to see his homeowners-insurance premiums go up — by more than 50 percent this year alone.
"Sticker shock," Costner said, "has turned into getting tasered."
Costner is not alone.
Osceola County resident Dan Pearson told me his rates jumped 34 percent. Brevard's Linda Seals' went up 50 percent. Winter Springs' John Secor saw his double in the past two years.
And Orlando resident Scott Maxwell got news of a $700 increase just last week.
Fortunately for Maxwell (that's me), I found a way to shave that bill down by $1,000.
Fortunately for you, I'm going to tell you how.
But first, let's talk a bit about why Central Floridians are seeing massive increases — higher than most of the state. And most of America.
First, you have to accept that we live in a disaster-prone state. Insurance companies like to point that out.
But it's always been that way. Florida hasn't moved.
Instead, the skyrocketing rates are the result of a confluence of things: shoddy decisions and poor planning by the politicians; big profits and financial games played by the insurance companies; and the new way the industry has decided to assign risk — a major shakedown for those of us in Central Florida.
Let's start with the insurance companies.
Every year, they cry poor mouth — whether hurricanes come through or not.
Don't be fooled. Most insurance companies still make out quite well.
In fact, the Sarasota Herald-Tribune won a Pulitzer Prize for a series of articles about how the entire industry "is, at every level, rigged against consumers."
The series cited companies shipping money out of state, secretive rate manipulations and some companies that were so financially weak, they couldn't make all their payments if they had to.
But I wanted to hear from the industry itself.
So I reached out to Locke Burt, the president of Security First Insurance — the company that tried to jack up my premiums $700.
Burt claims his industry is a victim as well. And in some regards, he's right.
The state, for instance, really messed things up with Citizens Property Insurance — the state-run insurer that provides subsidized insurance to higher-risk homes.
I could write an entire column on why Citizens is a mess. But the short version is that we inlanders subsidize the premiums for coastal dwellers, including owners of second-homes on South Beach.
It's nonsensical and unfair. I have no interest in subsidizing second homes of oceanfront mansion-dwellers. And it's insane that this alleged "insurer of last resort" is now the biggest insurer in Florida.
Still, Burt said the thing that most affects your rates is the cost of "reinsurance," which companies like his buy to cover their own losses (basically, insurance for insurance companies). "We spend 40 percent of every penny we get on re-insurance," Burt said.
And reinsurance costs are skyrocketing, largely because the industry decided to reassess the way it calculates storm risk, concluding that inland Florida rates need to go way up.
Said Burt: "That affected Central Florida in very bad ways."
He pointed me to a chart that predicted reinsurance increases of 20 percent, 40 percent, 80 percent and more, depending upon the county and ZIP code.
In other words, things will probably get worse.
There are even more factors at play. Fraud is on the rise. Sinkhole claims are up. And rates are going back up, now that a subsidy, courtesy of Charlie Crist and the Legislature, is running out.
Still, most everyone involved in the game — the insurers, the reinsurers, the politicians — all make money off Florida's insurance market … at your expense.
So what do you do about it?
In the long term, elect different politicians.
But for now: Shop around.
I know that sounds simple. But way too many people get hitched to one company — and just keep on paying. That's a big mistake.
When Security First told me my rates were going up $700, I called my independent agent.
In less than an hour, she found a rate that was not only lower than what Security First wanted next year, but $300 lower than what we paid this year.
And that was for slightly better coverage with one of the state's bigger carriers.
So I told Burt I was firing him.
Burt was pleasant enough about it — and not really surprised either. He said different companies target different demographics, and that his offers the cheapest rates to those who live in homes much newer than mine.
So maybe the folks in Baldwin Park will be very happy with Burt.
As for me, I'm much happier with someone else.
But you know what? I'm certainly not wedded to them. If the rates go up, I'll shop around again.
And you should do the same in looking out for your own family.
Because, as Florida's track record clearly shows, no one else will.