You are in the most loved sunshine state and have recently bought a house just 663 miles away from the beach and are excited about it. What frustrated the property owners in Florida after they have landed their favorite house is the sky-high Property Insurance. Research shows that Florida homeowners are paying double the insurance cost, so if the average cost anywhere else in the nation is close to $1,000, then the Property Insurance in the state is $2,000. This has almost doubled in the past few years. Anything in addition to any of these will come with an added cost.
Natural Disasters: The major reason why home insurance is so expensive in the area is due to the risk of natural disaster. Charley, Frances, Katrina have created a constant threat to the properties in the state and the risk of covering them has lead to an increase in the home insurance premium.
Politics and Regulators: There is no relief from the government as well (who in 2011 allowed the insurer to raise the premium to 15%). Even the Florida Insurance regulation approved 18.7% of an increase in the insurance. Even after so many years, these have not been altered.
Insurance Companies’ Model and Competition: Every Insurance agency in Florida followed the wind-estimate model that shows how they are at risk when the hurricane moves inward. This lead to a huge increase in the reinsurance purchase which was ultimately put on the buyers. Even with small insurance agencies, they are forced to follow suit in terms of premium in order to stay in the market.
Homeowners are thus asked to pay a large premium; causing confusion as to what they are rightfully a beneficiary of.
When you are talking about typical home insurance coverage it will offer:
Property insurance might be a cause of worry for residents in Florida, but it cannot be the reason they opt out from it. Get a home insurance quote for your property.