Florida Insurance: What to Know Before You Buy

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By Jessica Entwistle

The attraction of the Sunshine State is undeniable.  Warmer weather, low interest rates and a travel restriction that seems to have evaded the southern majesty, all make for curbside appeal on a mass scale.

I recognize the desire to escape slick roads, shoveling snow and the bitter cold weather that epitomizes winter in the north. A view of the ocean and waking up to waves crashing on the beach instead of plow trucks scattering salt all over battered roadways, makes sense.  I know that Florida home ownership will continue to exist, and I am not here to silence those dreams. Rather, I’d like to offer some insights on the current state of the Florida insurance market.  This will arm you with the complete picture and information you need to make sound financial decisions, negotiate with sellers, come away pleased with your new retreat and ensure you are properly protected.

The state of the Florida insurance market is in crisis.  

As home lending rates are extremely low, it is unlikely your realtor will be advertising this out loud. But you need to know the difficulties that we face when trying to get you complete insurance, especially wind coverage. 

Due to the number of hurricanes in recent years, the number of insurance companies who will write new Florida homeowners wind coverage has dwindled, and of those who do, their guidelines have tightened.  In addition to the formidability of these guidelines, the number of, and payout amounts on claim lawsuits have recently tripled, as the state has not implemented any limitations.  This is causing insurance carriers undue pressure to keep reserves high.  These claims reserves are also regulated by the state.  Finally, because there are just as many residents migrating away from Florida as there are new residents enthusiastically arriving, many carriers do not have enough primary home policies on their books.  This means they’re taking on fewer secondary properties (vacation homes) based on their current business models.

Does this mean that your dream home may be at risk of not having any coverage for wind?  It may be difficult for us to find and expensive for you to put into place, but there are measures you can take to allow us options regarding your coverage:

  • Ask the seller for a wind mitigation report and make sure the home or condo is equipped with full opening protections.  This means reinforced hurricane glass for all windows and additional reinforcements on everything from your front door to any garage doors.  This is the single best measure you can take which will allow us options when it comes to finding you wind coverage.  
  • Additionally, you want to check the age of the roof.  While here in Pennsylvania a 10- or 15-year-old roof has years left in its life cycle, in Florida a roof 10-years-old or older will exclude you from coverage with many insurance companies.
  • New homes and new condos are the easiest for us to find coverage for in a difficult market.  If buying an older home, condo or townhouse, remember the measures above and have these discussions with both your realtor and insurance agent.  

Also, you’ll find a greater number of limitations on the southern five counties of the state. Particularly, it is hard to find coverage in Palm Beach, Broward or Miami-Dade if the home is not new or at a multi-million-dollar replacement cost level.

Florida vacation home ownership is a dream that can come to fruition without a headache, if you are prepared for the realities of the insurance wind market and take on the measures to give us the most options for you.  Call us today and together we will create a plan to make your Florida home purchase a reality.

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