How to Procure the Lowest Rates For Florida Homeowners Insurance

The Insurance Information Institute estimates that the average annual premium for homeowners insurance is $879. (Florida has the highest average premium, at $1,534 in 2007. the compounding effects of the national economy have exacerbated the problems as well. the Florida economy is in turmoil. Everyone is looking for ways to reduce overhead, and any increase in insurance premiums can have overwhelming effects on Florida homeowners.

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  be 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 bigger 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Choose a Home with Updates –  avoid older  homes with outdated wiring Knob and Tube, plumbing and heating, AC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 – The distance to fire station and fire hydrant
Consider the age of the roof– 10 years or newer for shingle roof or  can be 15 for tile roof
Consider Construction materials– masonry block built over frame built
Consider Flood Zone– 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 the cost to repair or replace was $2000 and you had a $2500 deductible even though the company did not pay the claim and instead you covered the cost, this claim could still go on the exchange and prevent you from qualifying for the most affordable rate or company. 

Consider Your Credit Rating- While not all carriers review credit increasingly more are using credit factors to determine the likelihood an insured might file a claim or even a fraudulent claim.

Manage Your Policy Premium Optional Coverage’s

  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

Review Discounts with your Agent

Ask your agent about discounts up front, some companies don’t offer them or have discontinued them. Discounts can be applied for the following:

  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 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.  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.
  4. Roof Type– HIP roof credit provides a substantial credit for the roof elevation type. The roof must not include more than 50% of any other type of elevationon any one side.
  5. MultiPolicy discounts– offer your auto to your agent to see if you can get a joint policy discount
  6. Retired homeowner– over 55 discount
  7. Home Improvements– Updates can result in home improvement credits when they apply to the roof, electrical or plumbing.

Shop Carriers or Have Your Agent Shop for You

  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 here are a few recent ones:
    Allstate- Castle Key Insurance- Castle Key Indemnity has filed for average 17.9%
    State Farm– was granted a 14.8 % increase
    Royal Palm- 21.7%
    Citizens- 8.4%

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