Finding affordable insurance coverage is getting even more difficult for Florida homeowners as American Mobile Insurance Exchange (AMIE) announced it’s canceling mobile and manufactured home policies across the Sunshine State.
Florida’s Office of Insurance Regulation is supervising AMIE’s runoff after the insurer cited $15 million in losses over three years, Insurance Information Institute (Triple-I) Corporate Communications Director Mark Friedlander told Insurify.
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.
The cost of home insurance
Florida is the most expensive state for home insurance in the nation. Florida’s average annual home insurance premium is already more than $10,000 for $300,000 of coverage and will be $11,759 by the end of 2024, according to Insurify’s home insurance report.
General inflation, replacement cost inflation (from supply chain issues and labor shortages), and costly losses from natural disasters are driving rising homeowners insurance rates, according to Triple-I.
“Another unfortunate factor proliferating the rising costs of insurance is legal system abuse, which basically entails billboard attorneys swaying Americans toward litigation as a first step, rather than one of last resort,” 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, and rates increased about 80% less than projected in 2023, according to Triple-I. Twelve Florida insurers have filed for rate decreases in 2024, and 24 have filed for no rate change, Friedlander told Insurify.
“This is due to a reduction in legal defense expenses and a flattening of reinsurance rates,” he said. “Additionally, nine new carriers are entering the market this year and are confident they can write profitable business in Florida due to the legislative changes.”
The struggle to find and keep coverage
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 themselves are struggling to find coverage for mobile and manufactured homes, especially those that are more than two years old, according to the Insurance Journal.
“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, according to Gardner — will have to buy coverage from Citizens Property Insurance Corp., Florida’s state-backed insurer of last resort. Though Citizens is working to reduce the number of policies on its books by transferring them to private insurers who can manage the risk, homeowners don’t have to worry about Citizens dropping their policy altogether.
But that doesn’t 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’ is more than double, at about $8,537 for the same coverage, according to Insurify data.
Friedlander pointed to 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.”
What’s next: Investing in resilience
Mobile homes come with their own risks, but Florida has a program to help owners of mobile and manufactured homes protect their property. The state Division of Emergency Management’s Hurricane Loss Mitigation Program works with Gulf Coast State College to offer the Mobile Home Tie-Down Program to retrofit homes installed in 1999 and earlier.
The program doesn’t bring homes up to code but makes the homes as “wind-resistant as funding, physical characteristics, and condition of premises will allow.” It can also help minimize damage from windstorms, tornadoes, and hurricanes.
The program is free, and homeowners can apply online.
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