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Is Homeowners Insurance Required In Florida
Do you need really homeowners insurance in Florida? Yes. Though homeowners insurance isnât required at the state level, nearly all mortgage providers require it. Whatâs more, if your home is in a Special Flood Hazard Area like most Florida homes, your lender will usually require you to have flood insurance, too.
Florida Homeowner Insurance Crisis Could Worsen As More Companies Downgraded
WEST PALM BEACH, Fla. Since the Florida state legislative session in May, little has changed in homeowners insurance premiums lowering.
Since January, up to 400,000 homeowners in Florida have been dropped by their insurance carrier or have received non-renewal letters.
Also, 275,000 homeowners had to find a new insurance carrier because their companies went insolvent, unable to pay their debts.
SPECIAL COVERAGE: Protecting Paradise
This could reveal more companies on the brink of insolvency, adding to what’s being described as a homeowners insurance crisis in Florida.
The Insurance Information Institute reports Florida homeowners are paying nearly three times the national average for yearly property insurance premiums.
The institute said Florida homeowners are paying an average of $4,321 a year when the national average for yearly property insurance premium is $1,544.
The reasons include rampant roofing fraud, runaway litigation and rising home repair costs, according to the Insurance Information Institute.
Citizens Insurance, the state-backed insurer, is nearing the one million client mark. It was half of that two years ago.
“It’s deteriorating literally by the day. Citizens’ growth is completely out of control. An insurer of last resort, a state-run insurer of last resort should never be the primary option for homeowners. It should strictly mean last resort, last chance opportunity to get coverage. Not first and only opportunity to get coverage,” Friedlander said.
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How Much Homeowners Insurance Costs In Florida On Average
Homeowners insurance in Florida can vary significantly based on your preferred coverage level. The average cost of homeowners insurance in Florida is $2,359 per year for a $250,000 baseline dwelling coverage. As you increase your coverage, your premiums will increase.
In Florida, the baseline dwelling coverage amount is $250,000, and these policies cost an average of $2,359 per year. The lowest dwelling coverage amount of $100,000 costs $1,236 less at an average of $1,123 per year.
AVERAGE COST OF HOMEOWNERS INSURANCE BY DWELLING COVERAGE
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Why Is My Florida Homeowners Insurance Being Canceled
If your homeowners insurance was canceled, it could be due to increased claims from hurricanes but also from fraud, according to a Miami Herald report.
“Florida statute Chapter 224 Part III allows insurers to cancel policies when the company would be placed in a hazardous financial situation due to an uptick in claims after hurricane damage or attorneys fees to defend itself over fraudulent adjuster claims,” the news report said.
State legislators passed an anti-fraud bill that limits legal fees and the period in which a property-damage lawsuit can be filed.
There are many other reasons why homeowners insurance policies get canceled. Cancellation may be triggered by filing multiple claims, failing a house inspection or because your insurer believes the area you live in is too much of a risk for storm damage. If your homeowner insurance is canceled there are steps you can take to find out why and appeal the decision.
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What Are The Best Home Insurance Companies
The best home insurance companies depend on where you live and what you need. It is a good idea to select several insurance companies and then shop around to compare quotes and coverage options before purchasing a policy. Bankrate chose some of our favorite home insurers in Florida as a place to start.
Why Is Homeowners Insurance Going Up In Florida
Make no mistake homeowners insurance rates continue to increase in Florida. Case in point: Insurance regulators are considering raising rates for Citizens Property Insurance Corp. the state-operated carrier of last resort by nearly 11%, which would take effect in August 2022 if approved, according to Miami Herald reporting.
Insurance companies cite the following reasons why homeowners insurance is so expensive in Florida:
- High rates for reinsurance, which is insurance that backs up insurance companies
- Water-leak damage claims from non-hurricane causes
- Claims from recent hurricanes are still being filed, as homeowners have a three-year window to do so.
Two other primary factors are driving the excessive rate increases Florida homeowners are experiencing: rapid roof replacement fraud schemes and runaway litigation, says Friedlander.
Unscrupulous roofers tell homeowners there was recent storm damage in the area and are replacing roofs for free, even when they dont qualify for insurance coverage. The insurer rejects the claim because its not a legitimate insured loss the contractor partners with an unscrupulous attorney to file a lawsuit against the insurer. Even if the case never goes to court, the related expenses are exorbitant for the insurer.
Friedlander explains that Florida is the most volatile private insurance marketplace in the country and is on a trajectory toward collapse due to these roof replacement fraud schemes and runaway litigation.
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What Does Homeowners Insurance Cover4
Of course, the ability to repair or replace your home is foremost in homeowners coverage. But it also covers the items you value that arent permanently attached to your home or your property. Like, for instance?
Jewelry, collectibles, pictures
Cameras, musical instruments, sports equipment
Appliances, furniture, clothing, electronics, lawn decorations, swing sets, tools
Lightning, wind or hail, freezing of a plumbing system, weight of ice, snow or sleet
Damages resulting from fire, theft or vandalism
Abrupt and accidental discharge of water from plumbing system, tearing/bulging of heating or cooling systems, artificially generated electrical current
Keepsakes
Cameras, musical instruments, sports equipment
Home & Garden
Appliances, furniture, clothing, electronics, lawn decorations, swing sets, tools
Nature
Lightning, wind or hail, freezing of a plumbing system, weight of ice, snow or sleet
Random Acts
Damages resulting from fire, theft or vandalism
Other Causes
Abrupt and accidental discharge of water from plumbing system, tearing/bulging of heating or cooling systems, artificially generated electrical current
Do I Need Homeowners Insurance
Youre usually not required by law to carry homeowners insurance. However, most mortgage lenders will require you to buy a policy as a condition of the loan.
Your policy not only protects you, but also your lenders investment. In fact, mortgage companies are allowed to buy a homeowners insurance policy for you and charge you for it if you fail to buy one on your own.
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Will My Home Insurance Rates Go Up
Yes, home insurance rates typically increase every year to keep up with both inflation and risks. And Florida homeowners have faced increasing storm damage, which tends to increase rates over time. Florida home insurance rates have increased by 33% since 2016, compared to the national average of 11%. It’s a good time to shop around for a new policy if you get a notice that your rates are going up. Since each insurer decides how much to change rates every year, you might find a better deal from another company.
No Minimum Policy Requirement
The provision contained no requirement that companies selling auto insurance write a minimum number of homeowner policies, said Mike Fasano, a former legislator from the Tampa Bay area who later tried unsuccessfully to strengthen the law to one that required insurers to sell everything in Florida that they sell elsewhere in the country.
The provision that was enacted doesnt say how many policies they have to write, Fasano said in a recent interview. It allowed them to say, OK, were writing 10 policies in Hardee County. Therefore were writing both. It definitely was watered down. It should have said, If you write 1,000 auto policies, then you should write 1,000 homeowner insurance policies.
Thats closer to a suggestion by Hollywood resident Pat Crowdery in a May 2021 email to the South Florida Sun Sentinel addressing insurer pullouts and rising rates. If our state government did its job, they could pass legislation that would require any company that wants to write auto policies in the state to also take a certain percentage of homeowner policies.
She noted that the idea might be complicated to implement but doable. The big national companies all spend lots of advertising dollars trying to lure consumers into purchasing an auto policy from them while they shirk their responsibilities to the state by not offering home policies to those same consumers, she said. Its immoral to put this current crisis on the middle class.
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Shop Around To Get Cheap Insurance
No matter what company you’re currently getting auto insurance from, remember that it’s important to shop around and compare quotes from multiple companies. Prices and offers change over time, and you may be able to save by switching to another insurer.
Be sure to take advantage of potential discounts. Many insurers offer car insurance discounts for things like bundling other types of insurance with your auto policy or going years without filing a claim.
Determine How Much Coverage You Need
Start with the coverage limit. Consider the cost of completely rebuilding your home and replacing all the belongings inside it. An insurance agent may be able to help you figure this out.
Your lender may require you to carry a certain amount of homeowners insurance often equal to or greater than the amount of your mortgage. This may not be enough for your needs, so you can always purchase more.
At this stage, you should also consider whether youd like to insure your belongings according to their actual cash value or replacement value.
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What Is A Deductible
A deductible is present in every home insurance policy. It is the amount of money that you pay before your policys coverage kicks in. If your deductible is $1,000, you will pay that amount when repairs are made, even if the repairs cost more. Your provider will pay the rest, up to your predetermined policy limits. Often, choosing a higher deductible will grant you a lower monthly or annual premium.
How Do I Know A Claim Will Be Covered
- 2-10 HBW has been in the industry for over 40 years.
- More than 6 million homeowners have chosen and trusted 2-10 HBW to protect their homes through a Home Warranty Service Agreement.
- 2-10 HBW has paid 97.5% of claims, totaling more than $430 million.
- Customers consistently rate our service highly because we consistently provide qualified local contractors.
Each of these facts shows our longstanding commitment to covering qualified claims for our customers. For specific questions about your homes coverage, you can always refer to your service agreement by logging in to your Homeowner Portal account.
As an important reminder, 2-10 HBW covers breakdowns caused by routine wear and tear. Breakdowns caused by neglect or a lack of regular maintenance are not eligible for coverage. Fortunately, maintaining everything that keeps your home humming can be easy and straightforward, and we have tips and guides to help.
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Security First: Best For South Florida Residents
- J.D. Power Rating: NR
- AM Best Rating: NR
A relative newcomer to the homeowners insurance industry, Security First opened its doors in 2005. Unique from competitors in this review, the company offers coverage exclusively to Florida residents.
This Florida focus allows the company to tailor its coverage and endorsements to customers in the state and offer hands-on customer service. Security First offers unique policy add-ons such as golf cart protection and liability coverage and screened porch and carport coverage, along with a reasonable hurricane deductible that can be ideal for South Florida residents.
The company is BBB-accredited and holds an A+ rating. It also has a mobile app, but customer service hours are limited. Overall, Security First could be a suitable choice if youre looking to deal with a local provider with a range of policy endorsements.
Pros and Cons of Security First Home Insurance
Offers an affordable hurricane deductible Can help Florida residents purchase a flood insurance policy Provides more discounts and unique endorsements than many competitors
Isnt rated in the J.D. Power Home Insurance survey Doesnt offer 24/7 customer support, while some providers do
Want To Know More About Homeowners Insurance
The ground can shake in almost any state. Are you covered?
Protect your place from electrical fires
State Farm and Ting could help you prevent electrical fires before they happen for free.
Protect your home from wildfire threats5
In Arizona, California, Colorado, Oregon and Washington, Wildfire Defense Systems, Inc. will help protect your property on behalf of State Farm at no additional cost to you if a wildfire puts your home in harms way.
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Are Sinkholes Covered By Florida Home Insurance
Florida has more sinkholes than any other U.S. state. Sinkhole coverage might or might not be part of your standard homeowners policy coverage.
According to the Florida Department of Financial Services, state law dictates that all insurance companies licensed in Florida must offer sinkhole coverage. In most cases, this coverage is available as an endorsement on your standard policy and will cost extra.
However, insurers have the right to inspect your property and — if evidence of sinkhole activity is found — to decide not to offer you the coverage. They can also refuse coverage if your home is within a certain distance from confirmed sinkhole activity. If you are embroiled in a sinkhole claim dispute with your insurer, the Florida Department of Financial Services Neutral Evaluation program offers a neutral third-party professional to review the insurers findings. It is important to note that the DFS assessment is not binding to the policyholder or the insurer.
How Do Insurance Deductibles Work In Florida
An increasing number of insurance companies are turning to percentage deductibles when insuring homes. This is especially true for windstorm coverage.
A percentage deductible can be considerably more expensive than a traditional deductible. Instead of paying a flat fee of $500 , you could be charged a percentage of your overall Florida home insurance dwelling coverage amount. A 2% deductible on coverage of $100,000 leaves you on the hook for $2,000.
Insurance companies in Florida must offer a hurricane deductible of either $500, 2%, 5%, or 10% of the policy dwelling or structure limits, the III says. The good news in Florida is that windstorm deductibles apply per season, not per storm. So if you have the misfortune to be hit by three storms in one year, just one hurricane deductible is applied during the same calendar year.
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Why Do I Need Hurricane Windtorm Insurance
Florida is at significant risk for hurricanes every year, and the damage can be costly. Five of the 10 most costly U.S. hurricanes based on insured losses have impacted the Sunshine State, according to the III.
And there is nowhere to hide if you are a Florida homeowner. More than 75% of the states population lives in a coastal county, putting these residents in danger of a hurricanes high winds and storm surge. Even inland areas, such as Metro Orlando, can sustain significant wind and flood damage from a tropical system.
Another Crisis More Reforms
Most recently, the legislature held another special insurance session and enacted a package of reforms that lawmakers hope will eventually reduce high claims costs, stabilize insurance rates and encourage national companies to offer more policies in the state. Time will tell whether the reforms will be enough to lure more insurers back to the Florida market.
John Rollins, former chief risk officer for Citizens and current director of ventures, at Texas-based Evans Insurance Group, called Crists cherry picking ban a showpiece provision and said he was unaware of any enforcement activity.
Asked to comment on whether the cherry picking provision had any impact on Floridas insurance market, Crists campaign issued a statement that sidestepped the question and defended the package of reforms.
Ron DeSantis is the worst property insurance governor in Florida history, the statement said. We are in the middle of a hurricane season and under Ron DeSantis, homeowners are getting dropped left and right. I am proud of the law I signed as governor in 2007 that stabilized the insurance market, held companies accountable, and lowered rates 10 percent.
But not only do we need strong legislation that will protect Floridians, we need a governor who wants to enforce it. When Im governor, Ill be on the side of the people, not the insurance companies.
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Hurricanes And Tropical Storms
Florida sees the most hurricane landfalls of any U.S. state. Hurricanes and other tropical storms typically cause two types of damage wind and water and a standard homeowners insurance policy may not fully cover them.
Just about every home insurance policy excludes coverage for flood damage. If youre at risk, consider buying flood insurance through the federal governments National Flood Insurance Program or a private provider.
Wind damage usually is covered by homeowners insurance, but those in high-risk coastal locations may have to purchase this coverage separately.
Note that if your homeowners insurance policy does include wind coverage, there may be a separate deductible for claims stemming from a named hurricane. For example, you may have chosen a $1,000 deductible for your policy, but the hurricane deductible may be a higher amount, such as 2% of your dwelling coverage. On a house with $300,000 in dwelling coverage, youd be responsible for the first $6,000 of any hurricane-related repairs.
Learn more about hurricane insurance.