Homeowners insurance in Florida is not a pleasant subject

Homeowners insurance in Florida is a difficult subject to digest. In fact, it gives homeowners indigestion.

First is the difficulty a homeowner has getting a policy. Some people wanting homeowners insurance in Florida cannot get a policy because they live in areas that are prone to flooding or that otherwise are poorly located. Insurers are reluctant to risk issuing a policy to such homeowners without ramping up the cost, with the result that the homeowners cannot afford it. Not being able to afford a policy is the same as a policy not being available. Either way, a structure ends up being uninsured.

People caught in this situation are referred to Citizens Property Insurance Corporation, Florida’s official insurance agency of last resort. However, Citizens became so overloaded with truly high-risk policies that this year it was forced to cast the highest-risk structures back into the regular insurance market. That property owners caught in this yo-yo feel just a little bit desperate is understandable.

They are caught between not having insurance on their homes and paying such high insurance premiums that their budgets are wrecked and they are forced to consider bankruptcy. Not every pressured homeowner is in such dire straits, of course, but at the least they are paying far more for homeowners insurance in Florida than is financially advisable. This is partly because the marketplace in Florida was injured when some insurers simply quit offering policies in the state; as a result, premiums rose among remaining insurers.

Finally, in the event a hurricane strikes Florida—which has been spared in recent years—the cost of repairing a home is high. That’s because many homeowners have opted for high deductibles in order to keep premiums within realistic bounds. The money saved by doing so quickly becomes due after the storm when the first several thousand dollars of a repair job become the homeowner’s responsibility. A wise homeowner literally is saving for that rainy day.

Then there are the inflated prices for materials and repair labor after a storm. If a homeowner hasn’t purchased an extended replacement cost coverage add-on to his policy, he once again will be dipping into savings to offset the extra cost of post-storm repairs. Extra expensive, extra challenging to acquire, that’s the story of homeowners insurance in Florida.