Florida Homeowners Insurance Guide
If you own a home in the Sunshine State, this information will help you understand
Florida homeowners insurance and protect your home and the contents in your
house. Whether you’re living in Miami, Tampa, Jacksonville, St. Augustine or anywhere else in the Sunshine State, having sufficient
is an important part of smart home ownership.
Insurance Companies that Do Not Underwrite Homeowners Policies in Florida
- The Hartford
- Liberty Mutual
- State Farm
- 21st Century
Last Verified: 8/23/2011
Florida Homeowners Insurance: A Brief History
Like many other parts of the United States,
Floridians build homes in places that increase their exposure to risk.
For example, between 1980 and 1993 alone, the state’s coastal population
grew by 37%. During that same time period the value of Florida’s coastal
residential property increased by 135% and commercial property grew
192%. When Hurricane Andrew struck in August of 1992, 78% of the state’s
population lived in exposed coastal areas. In the aftermath of the
storm, Florida property and casualty insurance companies were faced with
over $16 billion in insured losses!
Up until that point, Florida insurance companies had
thought such a calamity highly unlikely. As a result, they had not prepared for
the unprecedented level of loss. Many insurers reacted to it by either
withdrawing from the Florida insurance marketplace or significantly reducing
their exposed risk with more stringent underwriting standards.
At the same time, the Florida Department of Insurance
and the state legislature took steps to make sure homeowners and businesses
would have access to affordable insurance. Their solution was to grant the big
insurance companies the authority to spin off special companies that confined
their risk pool only to Florida. Under this scheme, the companies could assess
risk and increase rates based on a consolidated geographic area rather than cast
a wider net for risk. In 2002, they created the state government-owned insurer
of last resort, Citizens Property Insurance Corporation. They also encouraged
new insurers to enter the market. These companies cherry-picked individual
policies from Citizens and sent offers to write those policies to the insured.
Initial rates were similar to those offered by Citizens, but renewal rates often
went up 30% or more. Unfortunately, many of these insurers were under-funded.
Eventually, the state Insurance Commissioner declared many of them insolvent,
leaving Floridians with the choice of state-run Citizens or no insurance at all.
Citizens Property Insurance Corporation currently has
some 1.4 million policies in force and writes more than 5,000 new policies each
week. If Citizens were to become insolvent, Floridians would be liable for
making up the losses resulting from a major hurricane or series of destructive
storms. By state law, Citizens is required to charge premiums that are high
enough to cover a 1-in-100-year hurricane without using bonds or assessments to
help make up for losses. For Florida homeowners forced to choose this option,
that could mean ever-increasing rates.
How to Find Affordable Homeowners Insurance in Florida
Stay informed about insurance legislation. As of
August 1, 2011, Governor Rick Scott had embraced a suggestion from the
board chairman of Citizens to consider privatizing the insurer. The very
best long-term solution is to contact your state legislators and let
them know where you stand on this and other homeowners’ insurance
Seek out every available discount. You may have trouble
finding a multi-policy discount (few Florida companies write both homeowners and
auto insurance at this time), but there are other discounts you should look into
such as those for installing home security systems. You should also be aware
that Florida law requires insurance companies to offer discounts or credits for
existing building features or home improvements that reduce hurricane damage and
loss. Since the wind portion of your Florida premium can be between 15% and 70%
of the total, making necessary improvements can result in savings. To
learn what types of features qualify, check out the Wind Insurance Savings
Use the state government’s agent locator website at
FAIA to find agents who write
homeowners’ insurance in your zip code. Deal only with reputable, solvent insurance companies.
You can easily check a company’s financial standing at rating services such as
A.M. Best Company. You can also check with your local Better Business Bureau to
see if complaints have been filed against a company. The Florida Office of
Insurance Regulation (
FLOIR ) is another excellent resource. To verify the validity of an insurance company use the Better Business Bureau's website to search by state or city. Comparison shop and look at as many quotes as possible
to find the policy that meets your needs and your budget. That’s easy and free
homeowner quotes. If you can, pay the premium annually. Insurers typically
charge more for incremental payments.
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