Basic Guide to Home Insurance in Florida

If you’re reading this article there’s a high chance you’re either interested in moving to Florida or you just want to invest in the local real estate market. Maybe you’re not even ready to purchase and you’re planning to rent a home for the time being.

The insurance market in Florida has built a reputation for being hard to navigate but, as long as you do your research, it doesn’t have to be. You might be concerned about the weather conditions here and how that impacts the kind of policies you need to consider or perhaps you want to make sure you get the most cost-effective option out there.

Historically, the U.S. home insurance industry has been, for the most part, regulated at state level rather than federal, despite some debate and efforts to find a different system. So it makes sense that you would want to know the differences between your home state and the one where you plan to relocate to.

Basic Guide to Home Insurance in Florida

Whatever your needs may be, this article should be a good starting point for you to get to know the basics of Florida’s home insurance policies.

Homeowners Insurance

In case you intend to finance the purchase of your new home through mortgage lenders, they will require you to have a homeowners insurance as part of their terms. You’ll need to have at least a basic policy.

This type of insurance helps you pay for rebuilding or repairing your home, as well as to replace any personal assets lost as a result of damage covered in the policy.

The average American homeowner will pay $1,173 annually in premiums, but Florida is one of the more expensive states with an average of $1,993.

This is partially because the price of real estate is higher here, but mostly because of the risks due to extreme weather events.

Florida experiences more thunderstorms and tornadoes than any other state. Just in 2016 insurance companies paid $3.46 billion in claims. That makes it necessary to have higher premiums.

Older homes are especially susceptible to wind damage because, in 1992, after Hurricane Andrew, new building codes were issued which included better methods of reinforcing garage doors, attaching roofs and windows that can better withstand the debris. Older houses are not as resilient unless they were retrofitted, this means you’ll be paying higher premiums.

Another factor to take into consideration when buying property in Florida is whether it’s located in an area at high risk for floods. These are called Special Flood Hazard Areas or SFHAs for short and they include most barrier islands and any land close to bodies of water or the coast.

The premium for flood insurance will also depend on getting an Elevation Certificate which will determine how much higher or lower the structure is than the Base Flood Elevation (BFE).

You can get flood insurance from any provider because the federal government has standardized rates through the National Flood Insurance Program which means you’ll pay the same no matter what company you choose. This type of insurance is not mandatory according to state laws but mortgage lenders usually require it.

Mobile Home Insurance

When it comes to mobile home insurance in Florida, you’re not legally obligated to get one. However, mortgage lenders require it and so do mobile home communities and parks. This means that the only way you can skip getting mobile home insurance is if you buy it yourself outright and you place it on private property.

The coverage offered by a standard policy is largely the same as with homeowners insurance. In terms of Florida weather, you will get wind coverage, but you have to get a separate flood insurance. State law dictates that insurance companies have to cover damages resulting from storms which are deemed hurricanes by the National Hurricane Center.

In order to get the best rates, your mobile home will have to be anchored according to state, city and county regulation.

The cost is usually higher than a homeowners insurance policy, since mobile homes are more vulnerable to damage caused by extreme weather so the risk is higher. However, you can get discounts if you install wind resistant features.

A standard policy will include:

  • Dwelling Coverage — the insurance company will pay to fix damage to walls, roof, deck etc. up to the chosen policy limit.
  • Personal Property — this covers personal items on the property such as furniture, electronics, bicycles that have either been stolen or damaged.
  • Liability Protection — this protects you in case you’re legally liable for bodily injury or property damage sustained by someone else. For example, if someone falls and gets injured on your property, they might sue you. In such an event, the insurance company will pay for the legal and medical costs up to your limit.
  • Loss of Use Coverage — Let’s say your home has been damaged to the point that it is no longer inhabitable for the duration of the repairs. The insurance company will pay for expenses resulting from having to live away from home: temporary residence such as a hotel room, moving costs, transportation etc.

Renters Insurance

In case you’re thinking of renting a home in Florida, you should know that renters insurance is not mandatory but many landlords will require you to get one. This type of policy will cover the cost of replacing your personal property which might have gotten stolen or damaged. It also offers liability coverage, just like for homeowners insurance or mobile home insurance.

Renters insurance will obviously be much cheaper than what your landlord pays, since you’re not covering the cost of the structure, just your personal items from inside the apartment or house.

Landlord Insurance

Landlord insurance costs, on average, 20 to 30 percent more than homeowners insurance because, in addition to the standard coverage, it also pays for any damage cause by tenants, unpaid rent or loss of income resulting from the property becoming uninhabitable. It does not, however, cover the cost of the tenant’s personal property so you will have to ask them to get a separate policy for that.

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