Canadian snowbirds will face higher insurance costs even if unscathed by Irma

Additional insurance costs will be borne by all insured Florida homeowners, including the estimated 500,000 Canadians who own Florida properties. (Photo: Statistics Canada/Facebook)

MONTREAL — Canadian snowbirds who were lucky enough to escape property damage from hurricane Irma will still face higher costs as insurance providers jack up premiums and condo associations levy special assessments, say Florida insurance experts.

“We’re probably looking at across-the-board 15 to 20 per cent increase in property insurance costs over the next year,” says Brad Hubbard, the Tampa owner of an insurance agency and an engineering consulting firm specializing in flood risk.

He said the higher premiums could come from greater insurance losses and reinsurance companies determining there is a statistical increase in the risk that future storms will be more frequent and severe.

Hurricane Irma is expected to be one of the mostly costly storms in history with losses estimated at US$20 billion to US$65 billion, including up to US$50 billion in the U.S., according to risk modelling software company AIR Worldwide.

Additional insurance costs will be borne by all insured Florida homeowners, including the estimated 500,000 Canadians who own Florida properties.

Condo owners could also face special assessments if their building sustains heavy damage that isn’t fully covered by insurance or its policy has a high deductible.

“Your condo can be fine but at the end of the year you could receive a bill that says $3,500,” added Martin Rivard, an insurance broker in Boynton Beach originally from Shawinigan, Que.

The situation could be especially acute in areas like the Florida Keys, where 25 per cent of homes were destroyed by heavy winds and storm surge.

Rivard said he’s always amazed by homeowners — especially Canadians who purchased second residences when they were extremely cheap during the housing collapse — who decline to take out a policy because of the increased cost.

“I’m hoping that Irma was a wake-up call,” he said in an interview.

The average price of homeowner’s insurance in high-risk wind areas of Florida is US$2,055 or US$1,500 if you buy through Citizens Property Insurance Corporation, a state-run provider. Flood coverage premiums average US$450, providing coverage of $250,000 on the structure and $100,000 for the contents, says the Insurance Information Institute.

Canadians are eligible to buy homeowner’s insurance from Citizens Property Insurance and flooding insurance from the federal National Flood Insurance Programs. Only 16 per cent of Americans purchase flood insurance and less than 10 per cent have no insurance at all.

Canadians were eager to buy insurance after hurricane Andrew devastated southern Florida in 1992, but Rivard said the concern has waned because the state hasn’t experienced a big storm in about a decade.

Renee and Dino Picchioni are relieved their mobile home north of Tampa was spared because they didn’t carry any insurance.

“It’s too expensive to pay for insurance down there for four months out of the year,” Renee said from Windsor, Ont.

Since they don’t own the land where their mobile home is parked, the couple was prepared to walk away if the unit was destroyed.

Rivard expects many others will do the same if their insurance doesn’t cover repair costs.

Realtor Jass Tremblay of Marathon said most of the Canadian customers she knows in the Keys don’t have insurance. While people with a mortgage are required to have insurance that covers wind, they can roll the dice if they pay cash.

Tremblay, a Quebec City native, said she hopes those without coverage would have put money aside so they can face such a disaster.

“Some of them lost everything. They’re probably panicking,” Tremblay said from Deerfield Beach where she holed up during the storm.

Brent Leathwood, a realtor in Sarasota who is originally from Burlington, Ont., said about 80 per cent of his Canadian customers are fully insured even though tougher building codes after hurricane Andrew have helped to minimize damage.

“Canadians tend to be, I would say, sober and pragmatic in their assessments of things and they’re a little less inclined to take big, crazy risks like some of the people in the states are.”

Florida’s insurance system has been strengthened since hurricane Andrew as the number of people living in coastal areas surged 27 per cent between 2000 and 2015, according to the U.S. Census Bureau.

“We feel that we’re in the best position we can be in at this time,” said Michael Peltier, spokesman for Florida’s public insurance provider.