Pros and Cons of Florida Home Insurance

09 Jan
A family in Florida enjoying the beautiful weather and backyard pool experience.

If you own your home free and clear or are just about at the end of your mortgage, you may be looking forward to the day you can call your homeowners insurance company and cancel your policy forever. While this may seem like a good idea, it can end up being a costly mistake if your home is damaged or destroyed by one of the major storms that strike Florida on a fairly regular basis. 

Homeowners insurance is usually a requirement. If you have a mortgage on your home your lender will require that you carry homeowners coverage to protect their investment. It’s not only a requirement; it can be a financial lifesaver. According to data from the Insurance Information Institute (III), most of us realize the importance of coverage with 98 percent of homeowners with a mortgage carrying homeowners insurance.

While you are free to dump your coverage once you have paid off your mortgage, most homeowners keep homeowners protection in place. Statistics from the III found that a mere 3 percent of homeowners leave their homes unprotected by insurance. In most cases, a homeowner will only drop their coverage if they cannot afford it or are wealth enough to self-insure. 

Unfortunately, rates in Florida are always high and according to ValuePenguin, the Sunshine State has the highest homeowner insurance rates in the country. The average premium, according to their statistics, is $2,055, which is a whopping 90 percent higher than the national average. The high cost of homeowners insurance and the fact that many Florida homeowners are retired and on a fixed income leads to homeowners taking the risk of going “naked” by dumping their coverage.

If you are considering dropping your coverage, we recommend giving it some serious thought. Here is a quick overview of the pros and cons of going without homeowners coverage. 

The Pros of Dumping Your Homeowners Insurance 

The pros of dropping homeowners coverage are few and far between. In most cases, there is only one reason to dump your homeowners insurance and that is the cost. 

Cost: When it comes to pro’s, cost is really the only reason to drop your homeowners insurance. Money can be a big motivator and putting $2,000 (or more) back in your pocket can be tempting. In addition to the high cost of homeowners insurance, if your home is located near the water or in a high flood risk area you may need to carry flood insurance on top of your homeowners coverage. 

All of this can add up and quickly spiral out of control, especially if you are retired and on a fixed income. However, unless you can easily afford to rebuild your home and replace all of your possessions, dropping your coverage is a horrible idea. 

While Florida had 10 years of hurricane free weather, hurricane Michael and Irma reminded us that Florida residents are often in harms way when it comes to severe weather. 

There Are Plenty of Cons to Dropping Your Homeowner Coverage

The list is a bit longer when it comes to the cons of dumping your coverage.

Rebuilding Your Home:Covering the cost to rebuild your home is the biggest reason you should always be protected by homeowners insurance. In the event that your home is seriously damaged or destroyed you will need to cover the cost of rebuilding your home and replacing your possessions. 

It’s important to remember that it is not only severe weather that can damage your home. Fire, wind, vandalism or even a lightening strike can cause major damage that you will have to pay for if you are not protected by insurance. 

The median price of a home in Florida is $230,000 according to Zillow but that price can jump up dramatically if you are located waterfront or close to the beach. If you let your homeowners insurance lapse you may be digging into your pocket for the $230,000 (or much more) to rebuild your house. 

Homeowners coverage will also step up to replace any outbuildings on your property such as a detached garage, barn, shed or other structures. Coverage extends to your policy limits. If you cannot easily afford to cover the cost of rebuilding your home, you should absolutely have homeowners protection. 

Liability:Even if you can afford to rebuild your home, the liability protection that a homeowners policy provides makes it well worth the cost. If a guest is injured on your property you could end up being responsible for their medical bills as well as the cost of a lawsuit and any resulting judgments, which can easily run into the millions of dollars for a serious injury. 

A large settlement or judgment if a lawsuit goes the wrong way can put all of your assets, including your home at risk. Your retirement savings and other major assets can be taken if you cannot cover the cost of a settlement or judgment. 

If you are determined to dump your homeowners coverage, we highly recommend carrying an umbrella policy to cover your liability risks. 

Living Expenses: Homeowners insurance offers cost of living coverage, which will help cover your costs if your home is unlivable due to a covered peril. This coverage will reimburse you for hotel bills, restaurant meals and even laundry costs if you can no longer stay in your home. These costs can quickly add up making this coverage a necessity. 

All Of Your Possessions: Take a few minutes to look around your home at your various possessions. Imagine if you had to pay to replace everything in your home. Could you easily cover that cost? If the answer is no then you should be carrying a homeowners policy. 

It’s important to remember that severe weather is not the only risk your possessions face. Theft, fire and vandalism can also do some serious damage to your personal property and if you are not covered you will be footing the bill to replace everything. 

Crime rates vary dramatically but in Florida, you have a 1 in 40 chance of being a victim of a property crime according to Neighborhood Scout. This equates to roughly 88,000 burglaries a year in the Sunshine State. 

When it comes to high value items, a homeowners policy does come with some limitations. Most policies have a limit on high value items such as collectibles, jewelry, art, cigars and even wine collections. While the limit will vary, $1,500 is common. If you have high value possessions that exceed this amount you may need to consider a rider to make sure your property is fully protected. 

A Few Final Tips

Here are a few tips when it comes to homeowners insurance:

  • Flood and Earthquake Damage: A common misconception when it comes to homeowners insurance is that it covers all damage. A standard homeowners policy will never cover damage caused by a flood or earthquake. Florida is well known for its severe weather and hurricanes, which makes flood insurance a necessity for just about everyone. 

As an example, Hurricane Irma resulted in over $1 billion in flood claims with the average claim coming in at $47,000. If you are not carrying flood insurance, that hefty bill will fall to you. 

In a Tampa Bay Times article Roy Wright, who oversees the Federal Emergency Management Agency’s National Flood Insurance Program, suggested looking at your drivers license instead of searching federal flood maps, “If your drivers licenses says Florida, you need flood insurance,” Wright said in the article. 

  • Raise Your Deductible: One way to lower your premium is to raise your deductible. Insurers are happy to lower your premium if you have more skin in the game so consider doubling your deductible if you can afford it.

Always choose a deductible that you can easily afford in the event you have to make a claim. Experts recommend keeping your deductible amount in an interest bearing account. 

  • Discounts Matter: Insurers love to offer discounts and they can seriously lower your premium. Ask your agent to do a full discount review on your policy to make sure you are getting every discount you are eligible to receive. 
  • Shop Around: This is a great way to lower your premium. Instead of dumping your policy, shop it around. Insurers rate risk differently which can result in dramatically different premium quotes. Shop at least five new insurers to find the best policy at the best price. Always compare apples to apples when it comes to coverage levels and deductibles. is happy to help you compare up to 12 rates and coverage options, allowing you to shop multiple polices all in one place. We can help you save money, while also improving your coverage, please click here to get online Florida home insurance quotes now.

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