Orlando’s Property Management Insurance Turmoil: New Entrants, Soaring Rates, and the Single-Family Home Advantage

There’s been a bit of an insurance crisis in Florida. 

There are a lot of reasons for this. We’re prone to natural disasters and risk. A lot of false claims have been uncovered, especially regarding roof replacement scams, sending rates soaring and kicking off lawsuits. 

Most alarming is the exit of insurance companies. Insurers such as Farmers, AIG, and Bankers Insurance Company have stopped writing policies for Florida residents over the last two years. Progressive stopped renewing policies in May of 2024. 

The turmoil is causing higher prices, with rates increasing from 30 to 100 percent. But, there are also some interesting developments that are worth watching, especially if you have investment properties in Orlando. 

New companies have entered the market to fill the gaps left behind by the 30 or so insurers who have left. Recently, the Florida Office of Insurance Regulation (OIR) approved eight new insurance companies to do business in the Sunshine State. 

What does this mean? Will these new companies make insurance more affordable for rental property owners and homeowners?

As Orlando property management experts with a lot of experience in the central Florida market, we’re going to unpack this. We’re also going to explain why the insurance crisis makes single-family homes a better investment than condos in associations. 

New Insurance Companies Writing Policies for Orlando Investment Properties

The newly-approved property and casualty insurers include:

• Ovation Home Insurance Exchange
• Manatee Insurance Exchange
• Condo Owners Reciprocal Exchange
• Orange Insurance Exchange
• Orion180 Select Insurance Company
• Orion180 Insurance Company
• Mainsail Insurance Company
• Tailrow Insurance Companie

These new companies might bring down insurance rates from property owners in Florida, but not right away. According to digital insurance agent Insurify, property and casualty insurance rates in Florida are expected to rise another seven percent this year, leaving the average premium statewide at around $11,759.

Any relief that arrives likely won’t show up until 2025.

If your Orlando investment property is insured by Citizens Home Insurance, you might want to look for a different policy now that there are additional options. While the company claims it’s in a stronger financial position than it was, regulators are trying to remove policies from Citizens, fearing that they do not have enough money in case of a natural disaster.  

Challenges for Insuring Property in Orlando

While the fraudulent claims and the natural disaster risk certainly plays into the insurance problems the entire state is facing, there are additional concerns for homeowners. Some of the problems exacerbating the struggle to find affordable insurance include:

• Roofs are Aging and Prone to Problems

If you’re renting out an older home with an aging roof, you might be surprised to find that your property insurance won’t cover that roof. The companies that continue to do business in Florida but refuse to renew cite roofs as a major reason. A new law may help. Legislators have made it illegal for insurance companies to deny coverage to a home solely based on the roof’s age, as long as that roof is less than 15 years old. Also, insurers cannot refuse to issue a policy if the roof has at least five years of life remaining. That won’t necessarily bring down your premium, but at least you won’t lose coverage. And, if your roof is old – talk to your Orlando property manager about a future replacement. 

• Claims are Taking Forever

If you’ve filed a claim with your property insurance company, you may be waiting and waiting some more. The OIR is working on some best practices and industry standards for handling claims in a timely manner, but if you’ve had one bad experience waiting for relief from your insurance company, you’re likely to be wary. 

Do yourself a favor and double-check that your insurance policy is intact. If you’ve been canceled or non-renewed, time is really of the essence. Get in touch with your insurance provider and discuss possible options for homeowners insurance. Do some research and find the companies who are still operating in Florida. If you’re running into a brick wall, work with an Orlando property management company that can provide some resources. You can also reach out to the Florida FAIR program. Citizens Property Insurance Corporation is a state-run initiative that provides insurance for those who cannot get a policy from the private market. As we mentioned earlier, this is a literal last resort, but it’s something versus nothing. 

Invest in Single-Family Homes to Better Protect Yourself 

Smart investors are not being scared off by insurance difficulties in this state. The real estate market is still strong, competitive, and fast-moving. If you’re looking to buy a new investment property or contribute to a growing portfolio, we strongly recommend you look at single-family homes rather than condos or association properties. 

Insurance is a big reason for this. 

Because of increasing insurance costs, HOA and condo association fees have jumped to astonishing levels. Not only is this difficult for investors to keep up with, it’s also bringing down list prices for those condos. No one is going to pay top dollar for a property when the association fees are nearly as much as the mortgage payment every month. 

There was a time when the condo market in Orlando and throughout Florida was stronger than the single-family home market. It makes sense: condos offer less maintenance and often more amenities. Taxes are typically lower, and they’ve always seemed like good investments. 

Now, however, owners are faced with those higher insurance costs when they’re insuring their own unit, and their association is facing higher costs for their master policy. Prices are lower and re-selling is suddenly more complicated. 

Florida law requires that all condos have “adequate reserve for replacements,” and that leaves condo associations liable for having enough cash on hand to replace their structures. Needing those reserves makes HOA fees higher, and a lot of investors are not bothering. Orlando, Jacksonville, and Miami have seen their condo markets struggle. While flood insurance rates have increased dramatically for single-family homes, it’s not nearly at the crisis level that condos are facing. 

Single-family home prices are doing better, particularly in Orlando. Prices have actually gone up, and there’s a large pool of buyers interested in these homes. Tenants, too, are eager to rent properties that give them the experience of homeownership without having to get the mortgage, deal with insurance, or take care of extensive maintenance around the property. 

Single-family homes are always attractive to both investors and tenants. Outside of the current insurance crisis, here’s why we like them for Orlando real estate investors:

• Attracting High Quality Tenants and Better Retention

A single-family home is always a great investment option when it comes to Orlando real estate because highly qualified tenants enjoy renting them. The tenants you attract with a well-maintained single-family home in a good location will want stability, and they’ll probably take care of the home just like it’s their own. Residents in single-family homes are more likely to stay in place for more than a year, so you’ll reduce the risk of vacancy and turnover costs. They’ll be attentive to taking care of the home, and that’s going to save on maintenance expenses and reduce deterioration.

• Better Cash Flow with Single-Family Orlando Rental Properties 

Cash flow is more easily achieved with single-family properties because they will typically rent for more money than condos. With the higher HOA fees and insurance premiums you’d have to pay, it is becoming increasingly difficult to achieve positive cash flow with a condo in Orlando. You’d have to increase rents beyond what the market tells you it’s possible to charge. Tenants won’t pay single-family home rents for a condo. 

With a detached property, the returns are also more reliable in both the short term and the long term. You’ll earn higher rents and your investment will also increase in value faster and more reliably than a multi-family home.  

• Tenants are More Self-Sufficient While Renting

With single-family homes, it’s generally accepted and assumed that your tenants will set up their own utility accounts. They have their own electricity, gas, water, and trash services and you can require in the lease that they set up those accounts before they move in. This will minimize your involvement and make the rental process easier. You’ll have to decide how you want to handle things like landscaping, lawn care, maintenance, and if you have a pool – pool upkeep. These responsibilities should be written into the lease agreement and discussed with tenants. 

What else can we tell you about the current insurance crisis that Florida real estate investors must deal with? We would welcome the opportunity to talk about it further with you. Depending on your specific property or portfolio, we might be able to offer some customized solutions. We can tell you more about where we think this situation is moving, especially with the new insurers approved to do business in the Orlando property market. 

Contact us at Homevest Management, Inc. for all of your Orlando property management needs. We serve all of Central Florida, including Winter Garden, Doctor Phillips, Baldwin Park, Winter Springs, and Windermere.