This week, hundreds of homeowners in a 55+ living community, known as Century Village, in Pembroke Pines, Fla., gathered together to protest an increase in their monthly housing fees due to skyrocketing insurance costs, as several insurers flee the state.
Homeowners were sent an email from Century Village that they’d have to pay an additional $100 to $200 a month due to “skyrocketing insurance premiums,” adding a potential special assessment for some units, according to NBC6, a local TV news outlet in South Florida that was first to report the incident. Footage shown in the TV segment shows several residents crowded together, visibly upset and shouting (although it’s unclear what exactly they’re saying). However, it seems that the protest escalated and police were called. Still, one resident told NBC6 reporter Laura Rodriguez that the increase in costs is forcing him to sell his home.
“So now we are over $700 a month that we are paying just in HOA fees, and they’re going to kick it up to $1,000 a month,” the resident told the reporter. “We have no choice, we have to sell. As a matter of fact, I just put my house on the market 10 minutes ago.”
Residents at the 55+ community Century Village Pembroke Pines said they’ll be paying $100-$200 more due to “skyrocketing insurance premiums.”
“We are over $700 a month in HOA fees, and they’re raising it to $1k a month. We have no choice, we have to sell.”https://t.co/UNGL3PR4XX
— Thomas Kennedy (@tomaskenn) August 17, 2023
Century Village did not immediately respond to Fortune’s request for comment.
Housing markets in Florida saw substantial increases in home prices during the pandemic, and in most cases are still seeing increases. That coupled with mortgage rates that have more than doubled, with the average 30-year fixed rate recently hitting a 20-year high, has deteriorated affordability. But now there’s a new force putting a strain on housing affordability, and that’s rising insurance costs.
Homeowners in Florida are paying the highest insurance premiums in the nation, with an average premium of $6,000 per year, according to Mark Friedlander, the Florida-based director of corporate communications for the Insurance Information Institute. To compare, the U.S. average $1,700 per year. And recently, several home insurers have either pulled out of the state, like Farmers Insurance, or have chosen to renew fewer policies, like AAA—and that’s making it more difficult for homeowners to find coverage, or even afford it, as Fortune’s previously reported.
“Just in the last 18 months, 15 companies have stopped writing business in Florida. Three have voluntarily withdrawn—Farmers being the most recent—and seven companies have been declared insolvent,” Friedlander recently explained to Fortune, before AAA said it would reduce its presence in Florida, rather than pull out completely as Farmers Insurance announced its plan to do so.
There are several factors behind the state’s insurance exodus that range from claim fraud, to an increase in claims following recent hurricanes, to an increase in reinsurance rates. All of which, essentially raise costs for insurance companies, which in turn raises costs for policyholders. However, we’re seeing that some insurers are simply choosing to leave the state, and that only makes it harder for homeowners to find coverage, and makes that coverage more expensive.
Insurance concerns are already having an impact on Florida’s housing market, with a recent homebuilder survey showing that buyers’ concerns over the availability and affordability of insurance are somewhat slowing sales, which could potentially get worse.