Wednesday, September 16, 2009

Florida Homeowners' Insurance to Increase

Even though Florida has been hurricane free for a couple of years, 102 of the 190 insurance companies in Florida had losses. The state's largest insurer, State Farm Florida, is still planning to pull out from the state. State Farm has about 700,000 policies. The State of Florida is now the largest insurer of homes through its Citizens Insurance, but this is a risky business for Florida to be involved in.

The good news is the 16% drop in rates during the past 36 months, so when you see the headlines about rate increases, they must be measured against the past three years.

One of the first questions we get from potential home buyers moving to Florida is about homeowners' insurance. Some people read headlines and think there is no insurance available. There are still 190 companies writing policies, even though State Farm and others have pulled out. Moreover, the State of Florida will write the policy through Citizens Insurance if no one else will.

Another issue for newcomers is hurricanes. Most of the damage done is to older homes in low lying areas or areas on the beach. Needless to say, insurance is more expensive in these areas and for older homes. And it is not like we get hit by hurricanes every year in every city. For example, here in Martin County, we went almost 40 years without a major hurricane.

We educate all of our clients about the risks of hurricanes and what can be done to prepare properly.

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Posted by Mike Morgan, J.D., CRS, SRES at 9:02 AM
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1 comment:

  1. Larry WalkerSeptember 17, 2009 at 10:59 AM

    Mike, I think the storms of 2004 (not to mention Andrew) proved that hurricane damage is not always worse in the coastal areas. I think it's a real misunderstanding, especially with non-Floridians, that beachside properties are more vulnerable to storm damage. Even though most of the state is a low lying area, Florida for the most part is not subject to the major surges that are common in Mississippi and the western Gulf Coast, so, historically, most of our damage from hurricanes is wind-related. With a storm wider than the entire state, being 70 miles from the coast is unlikely to reduce one's chances of damage. All property owners are well-advised to take steps themselves to storm-harden their properties in addition to having the insurance that, as you pointed out, has come down in recent years. Keep up the informative posts.

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