Homeowner Insurance - Florida Rates - Not A Lot Of Options
I’ve written extensively about the homeowner’s insurance problem here in Florida. Our insurance is due for renewal soon, and we’ve been getting price quotes from a variety of companies.Â
After reviewing the quotes, we’ve decided to stay with our current provider, even though our rate has jumped nearly 40%. We do not live on either of the coasts of Florida, are not in a flood zone, and our home is relatively new and was built to meet all the hurricane standards.Â
We’ve been trying to educate ourselves as to what is underlying the current trend in escalating insurance costs, and some of the probable fallout.Â
First, the policy we have chosen insures our home for its replacement value, and since construction costs have increased, then the amount required to replace our home has increased as well. This is an expected cost of living increase.
Second, we are paying a 5% fee that was leveled to all homeowner insurance policies to help the Citizen’s Insurance Company stay afloat. Citizen’s was started as an “insurer of last resort” so that properties who could not obtain insurance because of their perceived risks (waterfront properties, etc.) would be able to obtain insurance.
Third, insurance companies are in the business of making money, and as such, the last couple of years was devastating to many of the insurance companies who suffered bankruptcy and have left the state. Many new companies just do not want to do business in the state, since their profit margins are not large enough to justify the risk involved.
Fourth, the insurance industry is based on speculative models, and those models all suggest future increased hurricane activity. Couple that with the massive amount of building that has occurred in high-risk coastal areas, and the amount of risk to the insurance industry is high.Â
Fifth, Citizen’s Insurance is going to be getting more and more of the business that nobody else will insure. Citizen’s is run by the State of Florida. If you are a Floridian, you need to know that all Floridians are going to be paying extra to help fund Citizen’s. There has even been a push to have federal dollars thrown the way of Citizen’s. I do not like having to pay for people’s insurance who live in high risk areas (like Key West) so I am sure that people living in other states would not take too kindly to this as well.
The bottom line? If you are considering moving to Florida you need to understand that the homeowner insurance rates are going nowhere but up. This is going to significantly affect everybody in the state. Why did we choose to stick with the insurance company we currently have? Because the only other quotes we could get were from companies we have never heard of before, and we need to have confidence that in the event of damage, we would actually see money from our insurance policy.Â
Effective Jan. 1, 2007, Citizens Insurance (now the largest property insurer in FL, and the “insurer of last resort” where an increasing # of homeowners in coastal FL must go for property insurance since it’s not available from any private company) is raising rates 25-35%, and was scheduled to have another 56% increase in March. But he Mar. increase has been delayed until after a special legislative session in Tallahassee. But the CEO of Citizen’s is on record as saying that the 56% increase WILL occur; it just may be delayed or phased in over 2-3 years to ease the pain.
State Farm just increased my homeowners in Pensacola from $2300 to $7800 for a $200,000 home. When I initially heard that State Farm was given a 59% increase I expected it to go up, up not over 300%. I live over a mile from the water, at an elevation of 57 ft. My home is brick and has never suffered damage in a hurricane. We have never made a claim in 30 years at this address and I have a hard time understanding why we are being charged so much. I have checked with my neighbors who have different companies and they are paying between $1700 and $3000 for similar or larger homes. My boss has State Farm, lives in an older home located two blocks from the water and suffered extensive damage in Ivan and his policy increased by only $400 to $3000. My mother lives on the water at an elevation of 16 ft. and pays a fraction of what I do. There just seems no rhyme or reason to the increases. I just wish someone could explain the reasons for the differences in costs. Obviously it has nothing to do with living near the water or claims for damage.
[...] I’ve been writing a lot lately about skyrocketing homeowners insurance and property tax increases here in sunny Florida. Down in Palm Beach County, Florida, land goes for a pretty penny.  Today millionaires were made in Briny Breezes, a mobile home park and the smallest municipality in Palm Beach County. Briny Breezes is a 43-acre town between the Atlantic Ocean and Intracoastal Waterway. The town boasts 600 feet of beachfront on the ocean and 1,100 feet along the Intracoastal. It is nestled between Ocean Ridge and Gulf Stream. [...]
In response to Mike Whaley’s comment….did you ever get an answer as to why your insurance went up so much more than others in your area? I have the same exact problem here in Ft. Lauderdale with State Farm. Last year $2300, this year $7300?
I’d like to pass along some valuable info… I live in Palm Beach Gardens, and after shopping around extensively, the best homeowner’s insurance premium I could get for 2007 was $8,670. I was recommended by a neighbor to an inspector who does Wind Mitigation Inspections in Martin and Palm Beach counties. He submitted a report to my insurance companies and 10 days later I received a renewal policy for almost $3,000 less. He specializes ensuring the insurance carriers offer all discounts possible (as opposed to the state-provided inspections). I’d gladly pass along his information if desired.