Echo Fine Properties CEO Jeff Lichtenstein recently discussed the state of the property insurance landscape in a conversation with FOX News Digital. Lichtenstein warns that homeowners in coastal, natural disaster-prone areas are facing an impending insurance crisis.
Lichtenstein attributes the rising insurance prices around the country to a combination of factors. Firstly, there is less reinsurance – insurance for insurance – available due to the increasing number of natural disasters occurring worldwide. This leads to a smaller pool of money for insurance companies to draw from, resulting in higher rates for homeowners.
In addition to the growing climate risk and rising material costs, Lichtenstein believes that some of the insurance crisis is “self-inflicted.” He argues that fraudulent litigious cases, particularly in states like Florida, have contributed to the rocky insurance landscape. Lichtenstein claims that Florida’s insurance issues are mostly caused by fraudulent claims rather than natural disasters.
Florida currently has the highest average homeowners insurance premium in the country, with Floridians paying over $4,200 for property insurance in 2022 – triple the national average. Lichtenstein states that Hawaii may also soon experience an insurance crisis following the destructive wildfires in Maui.
To combat the rising insurance costs, Lichtenstein advises homeowners to invest in stable roofing, impact glass windows, and generators. He also emphasizes the importance of humanitarian efforts in times of disaster.
Overall, Lichtenstein believes that improvements in infrastructure, better building codes, and the return of insurance companies when they can make a profit will gradually bring down insurance costs in the long run. However, he warns that it could take up to 18 months for rates to decrease and companies to explore reinsuring policyholders in Florida.
In the meantime, homeowners in affected areas will need to navigate the insurance crisis and ensure they have the necessary coverage to protect their properties.