A Guide to Home Insurance in Florida (FL)

If you live in Florida and are a homeowner then it is important to arrange comprehensive Florida Home Insurance that covers your home.

For many of Florida’s homeowners the reality is that this may well have been something that you have intended to have arranged, but have procrastinated about quite simply because home insurance in Florida is so expensive!

Unfortunately, the statistics bear out this gut feeling, because the US Census Bureau publishes statistics which records the average home insurance among the different states, and a recent 2011 report which covered 2007, showed that whilst the average cost of home insurance in the US was $822, the average cost of home insurance in Florida was $1,534; so almost DOUBLE the national average!

Why is Florida Home Insurance So Expensive?

It is certainly a reasonable question to ask why home insurance in Florida is so expensive, but the reality is that there are sound economic reasons why Florida Home Insurance Companies charge such high amounts for their premiums. It really comes down to the facts of the geography and population distribution of Florida.

Florida is surrounded by large bodies of water and the majority of the population live by the shoreline. Most of the time Florida is little different from other states in terms of the claims that its companies experience on home insurance policies, and thefts, fire damage and other losses are no worse than most other states which have much lower rates.

Where Florida differs is in the scale of damage that is wrought by storm damage and hurricanes, and in the re-insurance costs that the insurance companies in Florida have to payout in order to ensure that in the event of a big storm that they don’t become bankrupt.

In effect, what happens is that insurance companies in Florida offset the risk of big storms by reinsuring themselves against storm damage with other companies, and this has the effect of dramatically increasing the cost of premiums for Florida Homeowner Insurance.

If you consider that since 1851 there have only been 18 years where a hurricane has NOT hit Florida, and that up until 2008 it was estimated that storms that had swept through the state had caused well over $100 billion worth of damage, then it is perhaps not surprising that the costs of Florida Home Insurance are so expensive.

And the fact is that many of the biggest storms have hit in only the last 25 years.

Hurricane Andrew hit in 1992 and is estimated to have caused $26.5 billion worth of damage.

And then in 2005, Hurricane Katrina hit and caused property damage estimated at $81 billion.

Given those facts it could in fact reasonably be argued that home insurance in Florida is actually CHEAP at only twice the national average, because when storms hit in Florida they hit big, and it is the Florida Insurance Companies who have to meet the brunt of the clear-up costs from homeowners.

What Can You Do To Ensure You Get A Better Than Average Florida Home Insurance Policy

The first thing to realise before embarking on getting a Florida Home Insurance Policy arranged is that in most regards the home insurance in Florida is exactly the same as in all other states.

Typically it will cover you for six main areas and include both options to get additional cover, as well as excluding cover for certain things.

The six areas that would normally be covered would include:

Dwellings Cover – This is cover for your main home.

Cover for other Structures – This is cover for other buildings (not connected to the main dwelling), such as sheds, garages for cars etc. Normally this will only payout 10% of the overall cover amount.

Personal Property –
This is all the carpets, fittings, furniture as well as personal property. It is worth noting that there are a considerable amount of exclusions and limits that apply to this category such to cover cash, jewelry, silverware and many others.

Loss of Use Cover –
Clearly if your home burns down or is blown away in a hurricane then you are not going to have anywhere to live. So this category of cover will pay out for you and your family to stay in a hotel, and for reasonable expenses (such as food) whilst your home is being rebuilt. Typically this cover will be time-capped (a year is quite a common period).

Personal Liability – This would cover you for legal expenses and any payout (usually up to $100,000; though you can find policies that will offer higher amounts) in the event that you are sued by someone who is hurt whilst in your home.

Medical Payments To Other People –
This is designed to pay out reasonable medical expenses to cover the medical care for someone (other than family) who is hurt in your home. This would cover such circumstances as someone falling down the stairs, or burning themselves on the stove.

There are several exclusions to virtually all standard homeowner’s policies, and Florida Home Insurance policies are no exception.

Typically flood damage, earthquakes, rodent damage, wear and tear, nuclear accidents, war, insect damage and intentional damage are specifically excluded from most homeowner policies.

Additionally, the Florida Home Insurance Companies are certainly not blind to the main causes of their payouts to Florida Residents down the years, namely storm damage and hurricanes, so it is very important that you thoroughly read the terms and conditions of any Florida Home Insurance before fully committing to it.

You need to make sure with any policy in Florida that you have comprehensive hurricane cover, even if you have to pay considerably more to get it, because the devastation that these storms can wreak can literally wipe out your entire assets in one storm.

Be sure to read all of the small print carefully to make sure that areas that are often specifically excluded, such as flood damage, do not impede on the insurance company paying out for damage that was originally caused by a hurricane, even if your home ends up being flooded.

There can be considerable differences between the ways that different Florida Home Insurance Companies apply their rules, and you should make sure BEFORE disaster strikes that you are properly covered.

In most parts of the country catastrophic storms are relatively rare, and so even if you need to claim on your homeowner insurance, it is unlikely to be for a totally demolished property.
But unfortunately, in recent years, that has been very far from the case in Florida.

In conclusion, Florida is one of the most important states to make sure that you have got the very best home insurance that you can possibly afford, because the odds of you needing to claim on it are far higher than in most other states.

Don’t be put off by that fact however, as it is still possible to get relatively good deals on Florida Home Insurance cover. It simply requires you to spend a little more time shopping around for Florida Home Insurance Quotes, and then making sure by reading the terms and conditions carefully that all possible threats, such as comprehensive hurricane cover, are properly catered for.


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