What drives up the rates of Florida Homeowners Insurance?
According to the Florida department of insurance here are but a few of the driving forces:
- Increased Reinsurance Costs of insurers
- Premium reductions from the full implementation of mitigation discounts
- Fraud and Inflated Claims
- Erroneous or fraudulent wind mitigation credits at the retail level
- Replacement cost methodology
- Reported sinkhole claims
- Catastrophic assessment fees applied due to 2004-05 hurricanes
These increased cost and claim payouts by insurers affect the capital and stability that insurers need to remain profitable and stable in order to continue paying claims therefore a necessity that the cost were passed on to insured's .. additionally the selections of private homeowner's insurance companies are rapidly evaporating providing fewer and fewer choices. So what can you do to at least me informed and prepared.
Homeowners Saving Tips to Consider when Purchasing a New Home
Choose a smaller Home -Square feet-size is still king the larger the home the higher the replacement cost
Choose a Home with Updates – avoid older homes with outdated wiring Knob and Tube, Plumbing and heating, AC
Choose a home with Fire Protection -Distance to fire station and fire hydrant
Consider the age of the roof 10 years or newer for shingle roof can be 15 for tile roof
Consider Construction materials – masonry block built over frame built
Consider Flood Zones – Is the home in a flood zone (Your lender may require additional flood insurance)
Current Homeowners Seeking Best Rate at Renewal or Replacement
Avoid Claims-Claims are reported to CLUE (Comprehensive Loss Underwriting Exchange) in some instances even if you do not choose to move forward with the claim, example suppose you had water damage from an AC or pipe burst, you filed a claim and the insurer determined to cost to repair or replace was $ 2000 and you had a $ 2500 deductible even though the company did not pay out and you covered the cost, this claim could go on the exchange and prevent you from qualifying for the most affordable rate or company.
Manage Your Policy Premium Optional Coverages to Lower Your Premium:
1. Raise your deductibles options are: $ 500, $ 1000, $ 2500, $ 5000
2. Choosing depreciated personal property over full replacement
Removing optional sinkhole coverage
3. Lower Other Structures Coverage- Detached garage, Fencing, Pool Cages, Pools This is standard at 10% of Dwelling coverage adjustments that affect your premium can be made from 10%, 5%, 2% or excluded altogether.
4. Lower Personal Property coverage Everything not attached you own-Appliances, Furnishings Standard is 50% of the dwelling amount Some carriers allow you to decrease anywhere from 45% to minimum of 25%
5. Lower Owners Liability Coverage- Can be adjusted either $ 100,000 or $ 300,000
6. Lower Medical payments to others- Optional $ 2000, $ 3000, $ 4000, $ 5000
7. Raise Hurricane Deductible- flat $ 500, 2%, 5,%, 10%, or Excluded coverage
Research Discounts You May Qualify For:
Ask your agent for discounts up front, some companies don't offer them or have discontinued them. Discounts can be applied for the following: protective devices, newer home credit, wind mitigation, type of roof.
1. Protective Devices – Monitored Fire alarm, Burglar alarm, Gated community, guard gated community
2. Age of home- all homes built in 2002 or newer will receive a 68% new home discount on the hurricane-wind portion of your premium.
3. Wind Mitigation Credits- insurance companies are required Homes built after 2001 are automatically given the wind mitigation discount due to building code requirements however homes built prior to 2001 which have added a new roof after 2001 can provide a wind mitigation inspection from the roofing contractor or order a "Uniform Mitigation Verification Inspection" form (1802 form) about $ 90- $ 150 the saving can make a big difference in your homeowners annual premium depending on several factors by law to offer Windstorm Loss Mitigation discounts to homeowners that qualify. WLM is the act of minimizing the amount of loss that is caused by wind damage to your home.
4. Roof Type – HIP roof credit provides a substantial credit for the roof elevation type. Thr roof must not include more than 50% of any other type of elevationon any one side.
5. Multi – Policy discounts – offer your auto to your agent to see if you can get a joint policy discount
6. Retired homeowner – over 55 discount
1. Use an Independent who has access to many carrier and let them do the shopping for you
2. Ask your agent for an annual review each year to determine any changes or rate options
3. Stay abreast of current rate hikes and what carriers are filing for them
Avoid Carriers who have filed for Recent rate Increase Approval from the State if possible
Allstate- Castle Key Insurance- Castle Key Indemnity has filed for average 17.9%
State Farm- was granted a 14.8% increase
Royal Palm- granted 21.7%