Is Homeowners Insurance Expensive in Florida?

Living in Florida is an adventure for homeowners who wants to enjoy the serenity of the eastern seaboard. However, there is a pinch of paying higher homeowners insurance than in most areas in the country. It’s expensive, with a national average of $3645 a year. In this article, we will look more at Florida home insurance.

Why Homeowners’ Insurance is Expensive in Florida

Homeowner insurance in Florida is expensive due to the high probability of risk in the area. The insurance companies continue increasing insurance rates to cover their clients’ claims while also making profits. For instance, during the first nine months of 2021, insurers lost about $1 billion in net income. This is an effect of frequent claim cases, resulting in increased rates from the insurer. Some hazards that cause the expensive homeowner insurance in Florida include:

Weather-related Catastrophes

Florida is more prone to weather-related catastrophes due to its positioning between the Gulf of Mexico and the Atlantic Ocean; hence it’s exposed to the hazard of two coasts. The catastrophes include tropical storms and hurricanes, which lead to water and wind damage.

Unlike other risks that may cause damage to a limited area, hurricanes cause extensive damage. Unfortunately, most insurers do not include flood insurance in their standard policy. The people at risk should have separate flood insurance through the national flood insurance program. However, according to statistics, more than 80% of homeowners in Florida do not have flood insurance.

Wind damage is often included in the standard insurance, but exclusion is given to those near high-risk coastal areas. Also, if standard insurance covers wind, it may consist of deductibles to cover claims for hurricanes. For example, if deductibles are at $1000, the deductibles for hurricanes can be 2% or more, depending on the risk probability. Hence, if a home is insured at $400,000, a wind deductible of $16000 will be deducted from the compensation.

Few Insurance Companies

Due to the high-risk probability and occurrence, most insurance companies prefer not to operate in Florida. Others move out after a while of overwhelming claims and losses. This has led to fewer insurance companies in Florida, increasing demand for this life-changing service.

How Florida Homeowners Can Find Affordable Insurance

Despite the expensive nature of homeowner insurance, there is affordable home insurance in Florida. Whether it’s buying a new home or you want to insure an existing one, you can insure your home at a lower cost. Here are some tips:

For a New Home

If you are buying a new home, you’re above the game. The advantage is pre-planning to go to a place with reduced risks beforehand. For a reduced-risk home, ask about the history of hazards, such as hurricanes in the target area.

Your agent may have an overview of the area, which will help you make an informed decision. The seller may have specific information on risks in your potential home. While the agent and the seller may offer distorted information in a bid to sell out a property, you can ask your insurer. A good insurance company will provide you with a comprehensive loss underwriting evaluation (CLUE). It is a report that indicates if your potential home has had any risk claims and how many if any.

This information helps you know the home’s exposure to risks; hence you’re ready for an unknown future. It also calls for higher premium preparedness if the risk is high. However, most importantly, it helps you decide whether to buy a home.

For an Existing Home

If you have an existing home, all is not lost. You can still have affordable home insurance for your home. Before renewing your insurance policy, check if there are better insurance options than the previous one. With the few insurance companies in Florida, you can quickly go through their policies to settle for the most affordable one.

While it may be difficult to completely prevent the effects of natural hazards, upgrade your home to withstand them. Install a DIY security system to reduce the impact of break-ins in case of a hurricane. Also, have working sump pumps in place. To prevent excess flood damage, ensure that all cracks and holes are sealed to prevent water entry.

What Does the Florida Homeowner Insurance Cover?

Knowing what standard homeowner insurance covers help determine the other individual insurance you need. The typical homeowner insurance includes the following components:

Dwelling Coverage

Dwelling coverage is the most basic cover in home insurance. It covers replacement or rebuilding when damage occurs. It protects the walls, roof, floors, and other attached features, such as a porch. The insured has the option of partial or full coverage of their homes. The percentage you choose for main dwelling coverage is the basis of determining the other coverage.

Detached Structure Coverage

A detached structure coverage includes the structures that aren’t attached to the main building. They include fences, poolside gazebos, garages, and other detached structures.

Personal Liability Cover

If other residents are injured or their property damaged, personal liability covers them. It covers medical bills, attorney payments in the event of an accident, pet attacks, and more.

Personal Property Protection

Personal property protection coverage covers the contents of the main dwelling. The contents include clothing, electronics, furniture, artwork, kitchenware, and more. The expensive items may be covered partially, but you can add a premium for full coverage.

Loss of Use Coverage

If you experience extra losses beyond your policy, loss of use coverage helps out. It reimburses for costs incurred when your home is being rebuilt. They include costs on meal outs, transportation, hotel room fees, and more.

Medical Payment to Others

Medical payments to others help protect you from the high medical bills on people affected by the occurrence of a risk.

Bottom Line

Homeowner insurance in Florida is undoubtedly expensive due to the high exposure of risks. However, this shouldn’t stop you from enjoying your stay in the appealing sunshine state. Homeowners can still have affordable home insurance by applying the tips above. As a resident of Florida, be familiar with the various insurance companies so you can settle for one with the best rates.