Florida homeowner's insurance HELP!!!!?

Question

My father has a 50 year old house, market value at 250k. His homeowners insurance policy is 7k a year which I think is ridiculous.

I've done some research and am finding that there are only two companies that will insure a 1950's house: Citizens and Royal Palm. Is this correct? Are there any other insurance companies that will write a policy on a 50 year old house in Dade county???

I'm 800 miles away and think that my dad is really getting railroaded. Any suggestions....

Answer 1

That sounds about right. It is like that for everyone in Florida. Florida homeowners insurance is a mess. One of the execs in my agency has a condo in FL which is being nonrenewed because his company (a national one) is leaving FL. He will have an awful time finding other coverage, he is not looking forward to it & may go uninsured on the property (luckily it is a condo & he really only needs to buy contents because the association covers all of the building) & just get liability. I have an insured with a secondary in FL & he is inland and pays over $3000 on a small house & it took him 2 yrs to find a policy other than Citizens. If you father is on the coast, you are lucky there are there is a choice besides Citizens. You may want to find out the financial strength of Royal Palm, I never heard of them. There are a bunch of start up companies there that have questionable amounts of assets. The state is probably only letting them in due to desperation. Good luck. I don't know what options he has other than those 2.

Answer 2

He's not getting railroaded, the Florida homeowners insurance situation is a nightmare. Keep in mind, he might need THREE policies - one homeowners, a flood policy, and a WIND policy, as usually that's going to be seperate.

If I had to choose between Citizens - which is backed by the state of Florida, but took 9 months to pay off claims the last big hurricane - and Royal Palm, which has enough reserves, last time I checked, to cover 500 houses in Florida, I'd pick Citizens.

NO ONE wants to write Florida property. They can't make money at it.

Answer 3

The only company that I know of writing insurance form homes in Florida is Citizens. Most others are pulling out because of high lose rates the last few years.

Answer 4

You did not say what state you live in - but being 800 miles away - you may not be in a state that faces hurricane's. If you take a look at the state of Florida - it's a lot of coast line, it's a skinny state and it sticks out in the middle of the ocean - practically asking for hurricanes to hit it.

And if you remember recent years - hurricanes have hit it. ( In 2004 alone Florida had 4 direct hurricane strikes- estimated losses for the 2004 Hurricane season exceed 20 Billion - yep - BILLION with a B- and we have not even talked about what Katrina and Denis did to Florida in 2005!!!). And 2005-2004 are not the only bad years....1992 Hurricane Andrew caused over 25 Billion in damage in Florida.

And because the state is skinny - most hurricanes that hit cause damage to more than one coast line -usually to the pacific and gulf coast.

Insurance is a business. It is not a charity. Insurance companies - like every other business- have to earn a profit to stay in business. If they pay out more for losses/expenses every year than they recover in premium, investments and re-insurance - they go bankrupt. Therefore, the premiums paid reflect the risk faced by that state. Florida has very very high hurricane risk - Iowa does not. Therefore, there is a very good chance that homeowners insurance is more expensive in Florida than it is in Iowa. South Carolina and North Carolina also have hurricane risk. However, the risk they face is much less than that of Florida (each of the Carolina's have much less coast line then Florida). Therefore, homeowners policies in the Carolina's are cheaper than in Florida.

Having been built in 1955, your Dad's home most likely does not comply with the current building codes. After Hurricane Andrew - Florida revised it's building codes to make the homes more resistant to hurricane force winds. Since your Dad's home does not meet these code, there are fewer companies willing to take on the risk. This may also be a factor that affects your Dad's premium.

Your Dad may be able to reduce his premiums by taking measures to reduce the likelihood of hurricane damage - install hurricane shutters - replace the 1955 windows with new ones that are rated for hurricane winds. His agent may be able to give him some other suggestions of things he can do.

The only thing you can do - is meet with your Dad's agent. See if they can offer suggestions on things your Dad can do to reduce the risk hurricane damage and reduce his premium. Your Dad may want to carry a high deducible and see if that will reduce his premium some.

But be aware, insurance in Florida is a completely different animal from any other state in the US (with the exception maybe of LA or Miss). You can't judge rates in Florida by what you pay in your state.