Just Ask Tim - Blog
From 2017 to 2019 the Florida domestic home insurance companies have taken premium increases every year. The cumulative impact of these increases is staggering. If you were paying $2,000 per year for home insurance in 2017 it would not be unusual for you to have paid $2,600 for that same policy in 2019. But wait, in 2020 all the Florida domestic home insurance companies have been increasing premiums from 15% to as much as 40%. That means the $2,600 premium in 2019 would rise to as much as $3,600 in 2020.
When loan officers are qualifying a home buyer for a mortgage amount one of the components is the cost of home insurance. However, in almost every instance this year we see loan officers using outdated values when they are estimating the cost of insurance. If a loan officer were to use the $2,600 value from last year but the actual cost this year comes in at $3,600, you just added $83 per month to the estimated house payment. Additionally, home buyers are waiting until late in the process to shop for insurance. What they find is there are fewer insurance companies writing new business in South Florida and those that are have significantly increased premiums and added restrictions. For example, many of the remaining insurance companies writing new business in South Florida will not issue a policy on a home built before 2002 and with a replacement cost value less than $350,000. Many will not take a flat roof more than 10 years old or a title roof more than 20 years old. Others have added restrictions based on the age of the air conditioning, water heater, and the plumbing.
We recommend that once you have identified a home you want to purchase you call an independent agent to get a free estimate on what the insurance cost will be. This will give you an early indication of what insurance will cost or if you cannot secure insurance for the property based on age or other underwriting criteria. Additionally, you should consult with your real estate agent about the opportunity to write a clause allowing you to cancel the purchase contract if you cannot secure home insurance at an affordable price.
Teal Insurance Management specializes in home insurance and is located in South Florida. You can request a no obligation free quote by Clicking Here. You can also give us a call at (954) 678-2658 or email us at service@JustAskTIM.com.
As the home insurance market continues to get more restrictive and insurance companies continue to increase premiums, we are frequently being asked what can be done to lower the cost of my home insurance. This is a difficult question that begins with a review of your current coverages. Click Here to request a no obligation policy review. It is important to find a balance between affordability and adequate coverage, but here are some options to consider when trying to lower the cost of your home insurance.
We started this article with the statement we recommend our clients buy adequate insurance for the risk they have. However, in some cases clients will tell us they cannot afford to pay the premiums and need to lower their insurance coverage. This is not something we recommend, but we are here to serve our clients so if requested we will look at the following for opportunities.
There are other coverage opportunities that include mold, fungi, bacteria, sewer backup and ordinance or law. We can work with you on each of these to see if there is an opportunity to lower your premium by adjusting one or all of these. We just did an article about ordinance or law coverage, Click Here to open that article
If you are serious about looking for ways to lower your home insurance premium, we recommend you request an independent agent do a policy review. You can request one from us by Clicking Here. We begin by asking you to forward a copy of your current coverage page, also know as your declarations page, from your policy. We will then review the coverages you have and email you with questions. You can also call us at (954) 678-2658 or send us an email at email@example.com.
Anyone who remembers Hurricane Andrew will never forget the level of destruction that storm caused. It also changed the Florida insurance marketplace forever. Because Floridians found it difficult to secure home insurance post Andrew, the State of Florida created the Florida Windstorm Underwriting Association and the Florida Residential Property and Casualty Joint Underwriting Association. The entities were created to provide home insurance to Floridians- who could not obtain home insurance in the private market. It took almost a decade before private insurance companies started to increase capacity. As the market began to improve, in 2002 the State of Florida merged these two state entities into Citizens Property Insurance Corporation of Florida.
Citizens had a simple purpose; 1) to provide qualifying Floridians home insurance coverage that could not find home insurance in the private market and 2) assure there is a path for these insureds to get back to the private market at some point in the future. Almost 20 years later, these are still the objectives of Citizens. There are many who believe Citizens is the insurance company of last resort. To some extent that is true, but Citizens will not take all homes. Like the private market they have restriction. Additionally, Citizens does not provide the same level of coverage available in the private market and your ability to customize coverage is also limited. Lastly, Citizens introduced the clearing house a few years ago and instituted a further restriction based on price. The rule is simple, if you can qualify for private market insurance you cannot be written by Citizens unless that private market policy premium is 15% or more higher than the Citizens premium.
Why are we choosing to write about this now? Because in the past year South Florida (Palm Beach, Broward, and Miami-Dade counties) have seen a significant increase in the number of private market insurance companies that will not accept new business. Many of those that are still writing new business have restrictions on the age of the home, the value of the home, and the condition of the home. Additionally, for the third year in a row the private market has continued to increase premiums in some cases more than 20%.
This has increased the number of Floridians receiving home insurance quotes from Citizens. It is our thought that Floridians need to be aware of the purpose Citizens serves, that the coverages are not the same, there are limits to coverage customization, and unfortunately the customer service and claims experience are not that great to say the least. We would advise Floridians to consider that even if a private market policy is 15% higher than Citizens you should consider staying in the private market if you can.
To learn more or ask questions give us a call at (954) 678-2658 or email us at firstname.lastname@example.org