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Is homeowners insurance required in Florida?
What are the risks if I don’t have homeowners insurance in Florida?
What are the most affordable options for homeowners insurance in Florida?
Is homeowners insurance required in Florida?
I recently bought my first home in Florida. I know that protecting my home with Florida homeowners insurance is a good idea, but am I required by law to purchase it? What are the risks if I don’t purchase Florida homeowners insurance? How can I make my Florida home insurance affordable?
You are not required by law to purchase homeowners insurance in Florida.
But it’s important to understand that your mortgage lender will require you to have homeowners insurance, and will require proof that you have it. Why? Well, your lender is technically part owner of your home. If your home is damaged in some way by something like a fire or a storm, home insurance helps you pay for making repairs or rebuilding.
If your home were destroyed and you had no way to pay to rebuild it, would you continue to make your mortgage payments? The home is uninhabitable, and the mortgage would have little to no value, so foreclosure isn’t a great option for the mortgage company to recoup its losses either. So your home insurance protects your mortgage holder from financial losses after a disaster as much as it protects you.
Some lenders may require the minimum amounts of coverage you need and the type of policy you purchase, in addition to some other stipulations. A Florida independent insurance agent can help you design a policy that satisfies all of your lender’s requirements.
What’s more, under the standard terms of most mortgages, if you fail to maintain your homeowners insurance, the lender has the right to get coverage for you and place coverage on your property via a “forced-placed” policy and then charge you for the policy in addition to your loan payments.Forced-placed insurance is very expensive and this outcome should be avoided.
And remember, even if you purchase your home for cash or you no longer have a mortgage, having homeowners insurance is always a good idea.
What are the risks if I don’t have homeowners insurance in Florida?
Homeowners insurance in Florida covers a wide range of perils that could potentially damage your home, your belongings, or certain other structures on your property. Technically, if you don’t have a mortgage you can go without homeowners insurance in Florida. But that is not a great idea.
If something happens to your home like a fire, a tornado, a burst pipe, or a burglary, you’d have to pay for repairs and for replacing lost or damaged belongings on your own. Imagine if you had a total loss due to a fire. Could you afford to rebuild your entire home?
A homeowners insurance policy typically categorizes coverage and coverage limits as follows. If you don’t have homeowners insurance, you put all of this at risk:
Dwelling Coverage
Dwelling coverage in a Florida home insurance policy covers the physical structure of your home and any attached structures. It also covers items like plumbing, heating, and permanently installed air-conditioning systems, and electrical wiring.
Homeowners insurance helps you repair and rebuild your home if it is damaged by certain covered perils, or causes of loss, including (but not limited to):
- Fire and smoke
- Lightning
- Wind
- Hail
- Theft
- Vandalism
Other Structures Coverage
This coverage protects other structures on the property such as detached garages, tool sheds, retaining walls, and so on.
Personal Property Coverage
Personal property coverage helps cover the cost of repairing or replacing your personal belongings, like your furniture, clothing, and electronics. Coverage for certain rare or valuable types of property (jewelry, furs, art, etc.) may be limited, but additional coverage can be added for individual items or categories of items to make sure your valuables have adequate coverage.
Loss of Use Coverage
Loss of use coverage helps you with additional living expenses if your home is damaged by a covered peril (e.g., a fire) and you cannot live in your home while repairs are being made. It typically covers expenses like housing, meals, storage, and more, as long as they are in line with your usual living expenses.
Personal Liability Coverage
The liability coverage portion of your Florida homeowners insurance provides coverage if you or a resident of your household is legally responsible for causing property damage or an injury to someone else. If, for example, someone is injured in your home, your liability coverage can help pay for the injured party’s medical expenses, and it also pays for your costly legal expenses and financial payouts if you are sued.
Medical Payments Coverage
This coverage pays for reasonable medical expenses for persons accidentally injured on your property.
You can also customize your policy to cover other risks. You can add coverage for identity theft, sewer and water backup, scheduled personal property, business property, and extended trees and landscaping coverage.
Having homeowners insurance in Florida is simply the smart way to protect yourself from the worst things that can happen.In Florida, you face potential threats to your property all the time. You have to deal with wildfires, tornadoes, hurricanes, severe thunderstorms, sinkholes, and other disasters.
You also have a risk for home burglaries, kitchen fires, wind damage, and so many other ways in which your home or your personal property can be damaged or totally destroyed.
If you own a dog or have a swimming pool, which is common in Florida, you face an increased risk of lawsuits. But with Florida homeowners insurance, you’ll be prepared to tackle a lawsuit without losing everything.
What are the most affordable options for homeowners insurance in Florida?
Homeowners insurance rates are definitely not one-size-fits-all, so it’s hard to predict the cost to insure your home. Every home is unique, and every homeowner has different coverage needs.
What we do know is that Florida has a very high likelihood of severe weather events, and for that reason the average homeowners insurance rates are higher than in many other parts of the country. Insurance companies simply need to charge more in an effort to offset the higher risk.
There are some things you can do to help keep your Florida homeowners insurance costs more affordable.
First, bundle your home and Florida auto insurance. Many insurance companies offer discounts to policyholders who have more than one policy with them, typically home and auto insurance.
Next, discuss your property in detail with your independent insurance agent. Certain home characteristics can help you qualify for a discount.
- Properties in gated communities may be eligible for a home insurance discount
- Homes with burglar alarms and fire alarms may be eligible for a home insurance discount
- Homes built by certain “accredited builders” may be eligible for a home insurance discount
- Homes with built-in sprinkler systems may be eligible for a home insurance discount
Another strategy for lowering your Florida home insurance rates is raising your deductible. Just remember, raising your deductible also increases your financial burden if you have a loss. Your deductible will have to be paid before your coverage kicks in, so you’ll need to be able to afford the full amount of the deductible in order for this strategy to be appropriate.
Finally, consider having a wind mitigation report completed for your Florida property. According to Florida statute, all insurance companies must offer Florida homeowners “discounts, credits, or other rate differentials ...” for certain construction techniques that help reduce wind damage caused by hurricanes, tropical storms, and other wind-related claims. Wind mitigation inspections can typically be performed by licensed home inspectors.
A Florida independent insurance agent can help you shop around for the most affordable Florida home insurance coverage that fits your needs. Independent agents aren’t tied down to one carrier, so they can obtain multiple quotes and help you make an informed choice. And your independent agent can make sure that you receive all of the discounts that you are eligible for.
