Many residents in Florida have had enough of skyrocketing insurance rates and the worsening cost of living.
Many people have had to turn to self-insuring their homes after their premiums have raised dramatically in recent years.
One Homeowner Is Fed Up
M. Friedman paid for property insurance on his home in Coral Gables for 17 years. However, he recently decided to cut his losses and stop paying an insurance company altogether.
He told CBS News Miami, “We’re getting to a point now where it’s really math.” Even with upgrades to his home, he’s closing in on over $10,000 a year for basic insurance.
Many In the State Forgoing Insurance
Mark Friedlander, the director of communications at the Insurance Information Institute, says an internal study shows that 15% to 20% of Floridians have forgone home insurance.
This number sits around 12% on the national scale.
Insurance Providers Have Left the State
Due to increasing major weather events and constant payouts for homeowners, several large providers have packed up their businesses and left Florida.
As global warming worsens in the Sunshine State, more homes increasingly suffer flood and hurricane damage each year.
Insurance Costs Have Skyrocketed
According to Bankrate, the average annual premium for home insurance in Florida is $5,531 for a standard $300,000 home.
The going rate for home insurance is almost two-and-a-half times higher than the national average of $2,270.
Coastal Cities Have It Worse
Some coastal cities in the state have even higher costs, like Fort Lauderdale, which sits at an average premium of $8,437 for a similar home.
The closer to possible hurricane and flood damage, the more companies will demand homeowners pay to insure their dwellings.
Alternatives to Traditional Insurance
Some homeowners have resorted to other options to combat the high housing costs.
Unfortunately, the high costs have forced many people, especially seniors on a fixed income, to leave the state entirely for greener pastures.
What Is Self Insuring?
Friedlander, unfortunately, does not recommend self-insuring as a good option to homeowners.
“Realistically, those homeowners can’t afford to pay for a catastrophic loss to their property out of pocket,” instead, he recommends staying insured, even with Florida’s outrageous prices.
Coastal Properties To Blame
Friedlander believes that the rising cost of home insurance across the state is tied directly to properties on the coast experiencing high chances of weather-related damages who work with surplus line insurers.
“They don’t have to follow the same regulations as the standard insurers, meaning they don’t have to get their rates approved,” he said.
What Could Happen Without Insurance?
If you choose to forgo expensive insurance on your home, you will be solely responsible for any damages or accidents that occur on your property.
Accidents could, unfortunately, include someone who hurts themselves in your home and decides to sue for damages.
Many People Would Go Broke
Needing to repair a roof after a storm or fix floors and walls due to flood damage could easily cost a homeowner several hundred thousand dollars.
A typical family in Florida experiencing these issues would not be able to pay the costs out of their pocket.
A Recent Bill Increased Homeowners Association Fees
On top of sky rocketing insurance costs, a recent bill passed by Governor Ron DeSantis also increased homeowner association fees in the state.
The new condo regulation bill was enacted earlier this summer and sought to stimulate HOAs throughout the state. The rule will charge homeowners for their own inspections and could cost an additional $60,000 to $100,000 per year.
