Any Florida homeowners here? What are you doing about home insurance rates?

[atikovi]

Have a place in Sarasota I inherited years ago and two years ago the insurance was about $2200. That company stopped writing policies so I had to switch to another one for $3600. Today I get the renewal and they want over $6000. No way. I’ll go without insurance before paying that much. In the 10 years I’ve had it and the 15 years before that, it’s never suffered any wind damage even though many hurricanes have passed through. Even if there is damage, the deductible is so high, it wouldn’t pay anything in most cases anyway. It’s a gamble, I know.

I don’t know the real estate market but can imagine this killing many sales when buyers see that insurance is almost as much as the mortgage payment. Aren’t realtors getting very nervous? Aren’t they contacting the state to do something about the insurance companies? Maybe set up a state run insurance fund? I wouldn’t want to buy a property in Florida now with these rates.

 

[JTK]

I often wondered about that.

It doesn't seem to be slowing the market down in FL, but I'm sure the rates vary greatly based on how close your are to the coasts.

 

[eljefino]

If the market works like it's supposed to, and the government doesn't interfere (subsidize), insurance will cost in line with what they feel will cover their risk.

If the insurance is too much to bear, either they'll strengthen building codes (again) or make more modest homes on what constitutes "higher" ground. Then the monthly payment of mortgage plus insurance will be bearable.

Realtors will be nervous because six percent of a modest home is a modest income. The strong will survive and the weak will go back to being hairdressers.

Cost of living in paradise.

 

[Dave Hess]

Go with no insurance and save the premiums for when you need a need a new roof.

HOA will probably require it….. but non HOA it’s best to skip it.

The likelihood of a catastrophic loss due to a natural gas leak and the house blows up is very, very small.

 

[atikovi]

Go with no insurance and save the premiums for when you need a need a new roof.

HOA will probably require it….. but non HOA it’s best to skip it.

That's the plan. Have an HOA but a detached house so can't be required to have it.

 

[The Critic]

The Florida insurance market is fubared on so many levels:

Florida insurance market needs strong medicine

If the Florida homeowners' insurance market were in a medical exam, the diagnosis would find the patient in dangerously poor condition. The patient's

www.insurancejournal.com

 

[NormanBuntz]

Coincidentally, today I got my renewal premium notice from Cabrillo Coastal Insurance, Gainesville FL. It was $2,012 for a 2,000 square foot stucco on concrete block home in central FL. Man, was I PO'd. It was an 84% increase from last year, even with zero claims since I purchased the house in 2016. Insured replacement value was $316,000 for the sake of comparison. I promptly declined and went with USAA, which was not taking on new homes in my area 6 years ago. Saved a bunch of cash and USAA claims it will never require me to replace my roof (now 17 years old), which is the current insurance company scam in much of FL. If your roof reaches a certain age, some insurance companies either will drop you or double/triple your premium.

 

[y_p_w]

Go with no insurance and save the premiums for when you need a need a new roof.

HOA will probably require it….. but non HOA it’s best to skip it.

The likelihood of a catastrophic loss due to a natural gas leak and the house blows up is very, very small.

Isn't it a requirement for most lenders? It certainly is with any mortgages backed by Fannie Mae. I had some really painful interactions when I switched insurance and the loan servicer (probably not the lender) didn't get the new loan docs.

 

[alarmguy]

WOW great post. I know Florida taxes are a bit higher there and we love Florida so sort of expect that, but the insurance thing I completely forgot about. Besides my lower taxes here I only pay $1,150 for homeowners on our 3000 sq ft home. Which is partly a result of always shopping around, the norm would be about 400 to 500 more for the middle of the road pricing.

I guess the "hazard" of living in a hurricane area. Yeah, doesn't seem to be affecting the real estate market though. I sort of feel priced out of what I wanted 5 years ago but wasn't close to being ready.

 

[Donald]

Insurance companies are very good at evaluating risk. And setting rates based upon risk. Upstate NY it was more about fire risk in rural areas without fire hydrants. In coastal areas it's more about storm damage. I am sure there are some insurance companies looking to get out of certain locations and have raised the rates in an effort to help in that direction.

Most states do have state agencies that oversee the insurance companies.

While you may not like the rates the insurance companies are not making a fortune on residential casualty insurance.

 

[atikovi]

While you may not like the rates the insurance companies are not making a fortune on residential casualty insurance.

Except they ARE making a fortune on me. No damage or claims despite numerous hurricanes over the years.

 

[The Critic]

Except they ARE making a fortune on me. No damage or claims despite numerous hurricanes over the years.

Profitability is viewed at a portfolio level in addition to an individual account level.

 

[atikovi]

Which is why the state should take over to remove the profitability aspect of it.

 

[edyvw]

It is a huge issue in Florida currently. Insurance companies are bailing out bcs. lack of govt. involvement after that building collapse.
Get ready for more price hikes.

 

[Dave Hess]

Companies can raise rates for future losses.

After Hurricane Andrew, some smaller companies went bankrupt so they were are allowed to fill the piggy bank up for a future disaster.

 

[Andrew1972]

I would keep liability insurance just not the replacement portions. Sounds like you can handle a full loss of structure given it is 2nd property.

 

[atikovi]

Liability is $18 of the policy. No chance they would sell me that alone.

 

[Jack Watts]

Which is why the state should take over to remove the profitability aspect of it.

based on the link posted above by Critic, the state is the reason the rates are so high, so I'm not sure putting them in charge is really going to help that much....

Pretty surprising, because I just assumed "well, it's hurricane country, what do you expect?". Looks like they're a lot more to it, and a few litigious folks (and companies) are bleeding the system dry.

Those insurance rates are indeed crazy high.

 

[The Critic]

Which is why the state should take over to remove the profitability aspect of it.

There isn’t any opportunity for profitability in the FL market. Any carrier in FL is losing their shorts and is supplementing the book with other lines of coverage and/or out of FL risks.

Liability is $18 of the policy. No chance they would sell me that alone.

Hypothetically they would write you a separate monoline liability policy, which would be subject to a minimum premium.

 

[EA82]

A few years back citizines insurance dropped our policy because they were forced to downsize, reason being they wouldn't be able to cover everyone in case of a major disaster, our property insurance went from $800 to the cheapest i could find at that time was $4000....outrageous.
Something similar is happening again, many people i talk to that have paid their house off are self insured...meaning they put aside whatever money they would have paid for insurance.
I live about an hour north of Sarasota and have Universal Property and Casualty Insurance, rates are reasonable.