Florida Homeowners Insurance
Florida can be a great place to buy a home. The weather is always warm and the ocean is nearby. Yet Florida comes with its share of risks. Hurricanes and other weather-related disasters can leave homes a wreck. Having the right home insurance policy is key.
Yet, insurance in Florida isn’t like other states. Natural events like hurricanes, wind damage, and flooding are treated differently by carriers and regulators.
So what are those differences? What should you expect when reviewing your home insurance policy? If you’re looking to insure a home in the Sunshine State, we’ve put together this guide that outlines Florida Home Insurance and what to look out for in policies and providers.
Let’s start with one of the most important factors of Florida home insurance: hurricane insurance.
Florida home insurance policies include two separate deductibles: your “regular” home insurance deductible and a separate "hurricane and all other perils (AOP)" deductible. Nineteen states and the District of Columbia have the separate hurricane deductible.
For Florida, the hurricane deductible was first introduced to following the damage caused by hurricane Andrew in 1992. Insurers realized that damages caused by hurricanes could be much larger than previously thought. This, coupled with the population growth and real estate boom that followed, made insurers realize they couldn’t carry all financial risks on their own.
To help contain costs, the Florida state legislature introduced the separate hurricane deductible. As of 1998, all Florida property insurance providers are required to offer them.
When Does A Hurricane Deductible Apply?
Of course, hurricane damage is never cut and dry. What about storms that occur outside the hurricane season window? What weather conditions will qualify the need to use your hurricane deductible?
Florida law states that hurricane deductible applies:
From the moment a hurricane watch or warning is announced in the state, as declared by the National Hurricane Center.
Until 72 hours following the end of the watch or warning.
Anytime hurricane conditions exist in Florida.
Homeowners should also know that the hurricane deductible only applies once per hurricane season.
How Much is My Hurricane Deductible?
This does mean, however, that Florida homeowners assume more hurricane-related costs. The hurricane/AOP deductible is typically a flat dollar amount. Homeowners who want to view the deductible can typically find it on the declarations section of their policy information. The policy is usually listed as a percentage of your Dwelling Insurance (coverage A).
On our website, you can find your standard and hurricane deductible on your policy review screen after you enter your address:
Most policies set the hurricane deductible at two percent (as we do), though you have the option to increase your deductible to up to ten percent. As with most insurance policies, the higher your deductible, the lower your monthly premiums.
Hurricanes are a different type of issue for Florida home insurers, and customers should know how they affect their policies. Yet hurricanes are only one weather-related issue that can affect homeowners. What about other wind-related damage?
Wind damage is typically included in your home insurance coverage, and may count toward either your standard or hurricane deductible (In fact, another name for your hurricane/AOP deductible is percentage wind deductible). The same hurricane-related factors will determine whether wind damage will apply to your hurricane deductible.
One exception to having wind damage covered on your home insurance policy is if your property is located in a Wind-Pool area. Properties that are located within 1,500 feet of a major body of water are typically within a wind pool zone. Unfortunately, many home insurance companies won’t offer hurricane coverage to those located in a wind pool zone. Fortunately, Kin specializes in these types of risks.
If you’re interested in Kin as your provider, your standard policy will cover an attached screened enclosure if it’s damaged by fire, or most non-hurricane perils. To protect your screened enclosure for hurricane damage, you would need to add the hurricane screened enclosure coverage.
New vs. Older Homes
The age of your home can also impact the your insurance premiums. Older homes are more susceptible to wind damage due to outdated materials and since-updated building codes.
Again, the damage from Hurricane Andrew drew attention to how homes should be built in Florida. The state introduced higher building codes, which included:
New standards for attaching roofs to homes
Garage door reinforcements
Windows that can stand up to debris blowing at high speeds
Of course, older homes can be more charming, making them attractive to those looking to move to Florida. Homeowners can take several measures to reduce insurance costs on older homes such as installing new windows adding hurricane traps.
Homeowners need to understand that flood damage is separate from hurricane damage. In other words, home flooding that may result from a hurricane is still considered flood damage, not hurricane damage.
Furthermore, flood insurance isn’t included in most standard homeowners insurance policies. That’s because flooding is considered an excluded peril, means that it's excluded from most standard policies. Special insurance coverage may be needed, and we're happy to offer our customers additional flood policies.
Homeowners that we're unable to cover may need to go through the National Flood Insurance Program (NFIP) for coverage.
All of the United States is considered a flood zone, as flooding can occur anywhere for a variety of reasons, including:
Hurricane and storm damage
Foundation damage due to underwater damage
Sump pump overflow
Yet again, Florida is different. Most of the state is located in Special Flood Hazard Areas (SFHAs), which are close to the coasts and other major bodies of water. Homeowners in SFHAs are required to have flood insurance.
Flood insurance rates in SFHAs are determined using the base flood elevation (BFE), which is the calculation elevation to which floodwater is expected to rise during a flood. Flood insurance rates decrease for each foot you’re above the BFE and will increase for each foot you’re below.
While BFE is an important factor in determining flood insurance rates, other factors are also considered. These can include home appliance value and location (e.g. inside or outside the home) and the number of stories.
Finding the Right Provider
Home insurance is different in a number of ways, which means you should take extra care in finding the right provider for you. Some companies may not offer all the coverage you need, or their rates may spike up to cover added risk.
If disasters like Hurricane Andrew in the early 1990s and Hurricane Katrina in the mid-2000s have taught insurers anything, it’s that large enough storms can put them into financially unstable positions.
Make sure your potential providers have funds to both pay insurance claims and operate on a day-to-day basis. You can ask them for financial information such as their balance sheet.
Kin is backed by an A.M. Best A+ related carrier, meaning that our policies are the gold standard in financial stability.
Insurance companies aren’t alone in providing insurance coverage. They purchase insurance themselves for “backup” in case a disaster drains their funds. These backup providers are called reinsurance companies.
Yet it’s possible that homeowners insurance companies may not purchase enough reinsurance. If that’s the case after a major weather event, claims may drain them of all funds, leaving them insolvent and unable to pay remaining claims.
To avoid this, ask your potential insurance provider for information about their reinsurance program.
In the event of a major hurricane or windstorm, you need to consider the availability of your insurance provider. Will you be able to reach them to file a claim?
Your insurance provider should be reachable via phone, online, or via social media. They should have knowledgeable, friendly customer service reps who can answer your questions and walk you through the claims process.
For processing claims, your insurance provider should be able to send a claims adjuster sooner rather than later. While timelines may depend on the number of other customers filing claims, your insurance company should lay out clear expectations so you’re waiting for them to take next steps.
Finally, your insurance company should have the physical resources available to help customers, including building supplies and electric generators.
Following Hurricane Irma, we sent drones to our customer's houses (with their permission, of course). This allowed us to get their claims started for them, in some cases before they'd returned home from their evacuation.
The above factors we’ve discussed can boil down to provider reputation. What do others have to say about customer service, issues with filing claims, and response time?
Potential customers should check insurer ratings scores on sites like Consumer Affairs and the Better Business Bureau. Both sites give an overview of provider services and include customer reviews. The BBB, in particular, assigns ratings based on the agency’s Standard of Trust, a set of best practices that outline how businesses should treat their customers and the public.
We collect feedback from customers in public at TrustPilot.
Before settling on a homeowner’s insurance policy, it’s important to understand what makes Florida policies different from other states. Some of these difference include:
Hurricane deductibles, which are typically higher than your standard deductible, which may apply during hurricane watches and warnings.
Living in a wind pool zone, which can increase rates.
Living in a SFHA, which will require you to purchase flood insurance.
We at Kin understand these differences unlike any other provider. We’ve been serving Florida homeowners with transparent policies that meet their needs while keeping premium costs low. Indeed, our premiums are up to 20 percent lower than the competition, particularly near the coastlines.
Ready to see how much you can save on your Florida homeowner’s insurance policy? Enter your address below to get your quote.