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Getting a good price on home insurance is a priority for many homeowners. Comparison shopping is the best way to find the coverage you need at a reasonable cost. We evaluated average rates from a variety of home insurance companies in Florida to help you find an affordable policy.
Cheap Florida Homeowners Insurance Cost Comparison
The cost of homeowners insurance varies greatly from company to company, so it’s essential to shop around if you want the cheapest Florida home insurance for your particular situation.
Related: Best home insurance companies
Florida Faces a Tsunami of Lawsuits as Home Insurance Costs Soar
In Florida, the most vulnerable state for hurricanes, insurers are warning that home insurance premiums—already some of the highest in the nation—will soar. But the main reason isn’t high tides, high water or high winds. It’s insurers’ high legal costs—the highest in the nation and rising all the time.
“Our estimate of the annual rate increase that may be necessary is 20% to 30%,” says Joseph Petrelli, president of Demotech, which rates the finances of 42 Florida home insurers. And some, like Gulfstream Property and Casualty, are already in liquidation.
Florida’s home insurance situation is so precarious that some consumers can’t obtain coverage, even at the average cost of $1,960. Among the 54,000 customers insurers are trying to drop is 94-year-old Betty Fonrose, whose damaged Melbourne home is wrapped in tar paper.
Many homeowners simply pay the increased bills and consider themselves lucky to have home insurance.
Since the state juts out between the Atlantic Ocean and Gulf of Mexico, it’s a natural landing place for major storms, and is battered even when there are no hurricanes. “2020 saw no major event make landfall in Florida, but it was still one of the worst years on record,” says Petrelli.
Home insurance companies have been getting smarter ever since Hurricane Andrew devastated the Sunshine State in 1992 and Hurricane Katrina—the largest storm ever to hit the U.S.—cut a swath across Florida in 2005 before inundating Louisiana. They now know more about when and where storms are likely to hit. They can limit exposure and reserve cash to pay their claims.
Florida Home Insurance Has ‘Degenerated Into a Racket’
But what Florida home insurers can’t stem is the bleeding from lawsuits. With a population of over 21 million, Florida accounts for just 8% of property claims nationwide, but more than three-quarters of all property claims lawsuits, many of which lawmakers say are frivolous. And more than 100,000 are expected to be filed this year. Since 2013, $15 billion has been paid out in claims. “And 71% went to attorneys,” says State Sen. Jim Boyd.
Florida home insurers face a no-win situation when they fight a claim in court, thanks to the state’s Assignment of Benefits (AOB) law. AOB allows a homeowner to turn his or her claim over to a contractor instead of dealing with the insurer. The contractor then hires an attorney, often before talking to the insurer.
The law states that if the lawyer wins a dollar more than the insurer offered, the insurer must not only pay the claim—which the contractor may have inflated—but also all legal costs, which could be thousands of dollars for a claim that might have originally been a few hundred. In one case cited by State Rep. Bob Rommel, the homeowner received $35,000; the attorney got $756,000.
Florida Gov. Ron DeSantis has said that the state’s AOB system “has really degenerated into a racket.”
Roofing contractors are aggressive in contacting Florida homeowners who may—or may not—have actual roof damage. So aggressive that they put flyers on every doorknob in many neighborhoods, while offering $500 gift cards. The situation became so bad that the state legislature passed a law, signed by Gov. DeSantis, restricting contractors from using “prohibited advertisements” to encourage homeowners to let them file insurance claims for roof damage.
But a federal judge slapped an injunction on the law when a roofing contractor said it violated his First Amendment right to free speech. And other roofing contractors subsequently joined the lawsuit, which hasn’t yet been decided.
‘Spiraling Toward Collapse’
Insurers and regulators say Florida is unique because of the power that lawyers have over the judiciary and legislature. But it represents a trend toward “social inflation” occurring across the country, which includes higher jury awards for people suing their insurers and organizations that fund litigation for profit.
“The U.S. has developed a culture of fault that’s extremely dangerous,” says Larry Crotser, who handles U.S. case management for Allianz, a major worldwide insurer. It’s led to “increased insurance losses” from “new negligence concepts.”
Will Florida insurers simply charge more and offer less? One complaint is that insurers are trying to ward off the threat of having to pay for a new roof by rejecting customers who have asphalt shingle roofs that are more than 10 years old.
Progressive wants to add a requirement for its Florida home insurance customers that their roofs must be 15 years old or newer, according to S&P Global Market Intelligence. This would apply to both new customers and those renewing their Progressive home insurance policies.
The legal hammering the state is taking could make things even worse. “Florida’s insurance market is spiraling toward collapse,” says a report commissioned by the Florida Senate’s Banking and Insurance Committee.
“A major storm could very well put the nail in the coffin,” says former actuary Howard Hagen, who has left Fort Lauderdale.
Homeowners Insurance Cost Factors
Several factors can determine your ability to obtain cheap home insurance in Florida, including:
- The age of the home
- The materials your home is made of
- The cost to rebuild the home
- The fire rating of your location
- The claims history of your location
- Your personal claims history
- Coverage limits and deductibles
- Your credit
Related: 10 ways to get cheap homeowners insurance
What Does Homeowners Insurance Cover?
A standard home insurance policy (designated as HO-3) covers your house for any mishap that’s not excluded in the policy. Common exclusions include sinkholes, power failure, neglect or wear and tear, nuclear hazard, vermin and insect infestations and intentional damage.
Your personal property is covered for specific identified “perils” in a standard home insurance policy. Theft, vandalism, tornadoes, fire or lightning and smoke are just some of the problems covered by home insurance.
A standard home insurance policy is composed of these main coverage types:
- Dwelling: This portion of the policy pays to repair or rebuild your home if it’s damaged. It also covers attached structures, such as a deck or garage.
- Other structures: This pays to repair or replace structures that aren’t attached to your home, like a fence, shed or in-ground swimming pool.
- Personal property: This pays to repair or replace your belongings after an event like fire or theft. Your personal property includes articles such as your clothes, jewelry, furniture, appliances, rugs and other household items.
- Liability: This pays for property damage and injuries you or other household members accidentally do to others. For instance, if you let your dog out without a leash and it bites a person walking by, your liability insurance may pay either a settlement or court judgment against you—and legal defense costs—if the person files a lawsuit.
- Medical payments to others: This covers minor medical claims made by someone not in your household, no matter who was at fault for the injury. For example, if a friend trips on loose carpet and sprains their ankle, medical payments coverage could pay for medical care they receive. Coverage amounts are generally small, such as $1,000.
- Additional living expenses: If you’re unable to live in your home due to an event covered by your policy (like a fire or tornado), additional living expenses coverage can compensate you for money spent on restaurant meals, hotel rooms and other necessary services, such as a pet boarding facility.
Related: How much home insurance do you need?
What’s Not Covered by Homeowners Insurance?
Common exclusions found in a standard Florida home insurance policy include events like power failure, floods, earth movement (sinkholes, mudslides, mudflows, earthquakes), neglect, wear and tear, bird, vermin and insect infestations and intentional loss.
It’s always wise to review your policy closely to understand what is excluded from coverage.
Most Common Disasters in Florida
The Sunshine State’s sunny skies can, on occasion, be darkened by a variety of disasters. Florida has seen its fair share of severe storms but has been hit harder with hurricanes and fires.
Florida has seen 45 declared disasters due to massive natural catastrophes in the last 65-plus years. The 2020 hurricane season had a record-breaking 30 named storms, and by December 2021 there were 21. While Florida has been spared any major damage from hurricanes the last couple of years, homeowners need to be prepared.
When buying home insurance in Florida, be aware of special hurricane deductibles. Typically they are percentage-based and calculated based on the coverage amount that you have for your dwelling. For example, if your coverage is $300,000 and your deductible is 5%, that equates to $15,000.
And while hurricanes are well-known in Florida, there have actually been more fires declared as disasters over the years. For instance, in May 2020, the Five Mile Swamp Fire persisted for five days due to extremely dry conditions. It caused a two-day shutdown of Interstate 10, burned around 2,300 acres and destroyed 14 homes.
Disasters by Month in Florida
March through October has historically been the busiest stretch of the year for declared disasters in Florida, with May and September being the busiest months.
Disasters in Florida by Year
Over the past 20 years, Floridians contended with an average of about 3.5 declared disasters a year. In 2001, one of the busiest years for disasters, Florida endured nine fires, a severe freeze, severe storms, tornadoes and a tropical storm. In 2020, Florida survived three fires, Hurricane Isaias and Covid-19 was classified as a biological disaster.
Flood Insurance in Florida
A standard homeowners insurance policy doesn’t cover flood damage. And with flooding becoming more frequent, especially with the severe storms Florida receives, you may want to consider flood insurance.
Florida is no stranger to back-to-back storms or hurricanes that can dump a lot of rain quickly, causing major flooding issues. In November 2020, Hurricane Eta hit southern Florida with rainfall measuring 16 inches in some areas of Miami-Dade County. It flooded urban areas, including businesses and neighborhoods.
Many areas in the U.S. experience catastrophic and expensive flooding, but these events may not have been declared a federal disaster. Here’s a look at the number of recent floods in Florida.
Financial help from the government after a flood can be limited. It’s best to have your own flood insurance to rely on. Most people who have flood insurance buy it through the National Flood Insurance Program (NFIP), a federal program. Private flood insurance is also available.
FEMA’s Individuals and Households Program (IHP) can provide monetary and direct assistance after a major disaster or emergency, if you qualify. This program helps people find housing after a problem directly caused by a disaster that’s not covered by insurance or other sources.
Earthquakes in Florida
Florida is one of the two states with the fewest earthquakes, according to the United States Geological Survey. (North Dakota is the other state.) Florida simply isn’t close to any tectonic plate boundaries. However, there are rare times when earthquakes do occur. For instance, in 2020, a 4.0 magnitude earthquake was recorded near the Florida and Alabama state line in Santa Rosa County.
Tips for Buying Homeowners Insurance
Whether you’re about to close on your first home or seventh or have decided to switch insurance companies, you want to know you’re getting a good deal on great home insurance coverages. Here are suggestions for both newcomers and longtime homeowners:
- Assess your rebuilding costs. Ask your insurance company or a known contractor how much it would cost to rebuild your home with similar materials, based on labor costs in your local area. You want your dwelling coverage amount to be equal to this estimate.
- Review the advantage of replacement cost over actual cash value. Consider replacement cost coverage for your home and belongings—you will get the amount you need to replace your home and items with new versions instead of a depreciated amount.
- Consider add-on coverage for your expensive items. If you have high-value items, antiques or pricey sports or musical equipment, determine if scheduling personal property to receive extra coverage is what you need
- Evaluate your liability coverage needs. Make sure you buy an amount that matches your assets, which could be taken from you in a lawsuit, or at least $300,000.
- Assess coverage gaps. Some home insurance companies offer add-on endorsements to cover items your standard policy does not. For example, pay for damage from water or sewer backups, or provide higher limits for landscaping if damaged by theft or fire.
- Check financial ratings. Research financial strength ratings from companies such as A.M. Best or Standard & Poor’s. Some financial institutions won’t approve your mortgage unless your insurance company has at least an “A” financial strength rating.
- Ask for discounts. It never hurts to ask if you’re getting all the discounts that you’re eligible to attain. For example, you may get a discount for smart home features, like flood sensors, or for buying home and auto insurance from the same company.
- Compare quotes from multiple insurance companies. The price for the same policy can vary greatly among insurance providers. Shopping around gives you peace of mind that you found the best policy for the best price.
Average home insurance rates were calculated using data from Quadrant Information Services. Rates are based on a policy with dwelling coverage of $300,000 and liability coverage of $100,000.