Home Insurance Articles
The Impact Of Home Insurance Regulations For Florida Residences
2010-02-18
Two major concerns for homeowners in Florida are damage to the home due to flooding, and damage due to hurricane winds. As a result, homeowners insurance in Florida provides options for both of these potential disasters.
Home insurance coverage in the state of Florida requires all insurance providers to include hurricane coverage. As a result of several recent hurricanes which caused significant damage to property, insurance premiums for all customers in the state have risen significantly. Any property located near the coast will have a higher hurricane premium, as will homes which are not properly equipped to handle hurricane-force winds. Florida insurance law mandates that homeowners who choose to upgrade the safety of their homes by installing hurricane shutters or impact windows be offered discounts by insurance companies for making these changes. Another change which can significantly reduce premiums is installing a more secure roofing system, or better securing the roof which is currently attached to the home. Damage caused by hurricanes is covered separately under Florida insurance law than other types of damage, such as fire or hail.
Florida homeowners have a choice in regards to what kind of deductible they wish to pay should they ever make an insurance claim. Under the law, residents can choose a $500, 2%, 5% or 10% deductible to be paid on any hurricane insurance claim. This deductible applies to the insured value of the home, not the value of the coverage, meaning that a 2% deductible on a home valued at $250,000 would be $5000. If the amount of hurricane coverage on the home totaled $50,000, the insurance company would then pay the remaining $45,000. Higher deductibles mean lower premiums, but could leave a homeowner in serious financial trouble, as a 10% deductible on the same $250,000 home would be $25,000. Most owners would not be able to raise that kind of money in short order.
The other serious weather-related issue which Florida homeowners face is that of flooding. Hurricane winds and the state's proximity to the ocean can often combine to create serious flooding situations. Unfortunately, Florida law does not mandate that insurers offer flood insurance as an option, and many do not offer it at all. In cases where a flood is declared a major disaster by the president, funding is available via disaster relief, but this is not a guarantee. Some counties and communities in the state participate in the National Flood Insurance program, which offers this type of insurance separate from a traditional homeowners policy. Although Florida suffers from a higher number of natural disasters than on average, upgrades to a home and savvy insurance shopping can result in a manageable quote.