With South Florida home insurance costs spiking,
now's time to review your policy
Article Courtesy of The Orlando Sentinel
July 26, 2016
Many if not most South Florida homeowners will get a
surprise in their mailboxes before the end of the year: Home insurance
premiums are increasing.
Your first instinct might be to look for ways to cut your bill to make
up the difference. Insurance experts say you might be able to find
hidden savings by taking a close look, along with your agent, at what
you are covering, how much coverage you have, the amount of your
deductible and whether you are getting all of the discounts you have
But be careful, they say, that you don't put yourself at risk of facing
a deductible you can't afford to pay, or getting too little money to
rebuild your home if a catastrophe hits.
Make no mistake: If your premiums haven't already increased, they
Already this year, 16 home insurance companies have secured approval for
widespread rate increases. Higher rates are in effect at eight
companies, and increases by seven others will kick in by Sept. 1.
Florida homeowner insurance rate increases by company as of July 22,
Nine more companies have submitted requests for state approval of rake
hikes that would take effect by the end of November.
We asked Florida insurance experts to help identify ways homeowners can
save money at renewal time or at least make sure you are getting maximum
coverage for your premium dollar.
They identified several factors to consider:
• Read your policy and know what it covers. "It's amazing how many
people spend very little time knowing what they've purchased to protect
their most important asset," says Jay Neal, president and CEO of the
Fort Lauderdale-based Florida Association for Insurance reform.
The most important thing policyholders can do is review their insurance
applications and declarations pages, says Nancy Dominguez, executive
director of the Florida Association of Public Insurance Adjusters. Is
all of the information correct? Does it list all upgrades and
storm-hardening improvements such as storm shutters, impact windows or
hurricane straps on roofs?
• Get a home mitigation inspection. For $100 to $150, a mitigation
inspector will come to your home, check out any feature that can qualify
you for a discount, then give you a report that you can submit to the
"You may be eligible for discounts with construction features that
already exist," says Lynne McChristian, Florida representative for the
Insurance Information Institute, an industry supported organization.
"Plus you will get ideas on home improvements that can earn additional
discounts and more importantly make your home more resilient and better
protect your family."
Dominguez said she failed to get an inspection "and overpaid on my
premiums for about five years. I thought my agent got it right. It turns
out, they didn't." The mitigation inspection saved her $800 a year, she
• Before you renew, sit down with your agent and review your existing
policy and your options. "See if anything needs to be changed," says
David Thompson, education instructor for the Florida Association of
Insurance Agents. "For example, the policy could have been endorsed
[additional premium] for a home-based business that has since been
Your agent can tell you which insurance companies are willing to cover
your home. Not all are, especially if you live in Miami-Dade, where
costly water damage claims and lawsuits have prompted some insurers to
blacklist certain ZIP codes. An agent can also tell you how insurance
companies differ — not only in what they cost and what they are willing
to cover, but how they respond when you make a claim.
Some insurance companies allow you to choose your own repair contractor,
while others have managed repair programs and expect you to use the
contractor they choose. Companies with managed repair programs tend to
be less expensive but might not be as thorough in how they make repairs,
If you do business with a "captive agent" — an agent who only sells one
company's products — consider talking with an independent agent able to
sell products from many companies, he says.
• Make the easy improvements. Do you have storm shutters for all of your
coverings except a side door? Say goodbye to a big potential discount.
"Adding shutters or impact glass is a huge discount," says Dean Fulton,
a Fort Lauderdale-based insurance agent, "but every opening must be
protected. That includes skylights, glass block, doors and garage door.
If you had 30 openings and protected 39, the discount is still zero. You
must protect all 40."
The same is true for roof-truss tie downs," Fulton says. "If you have 60
trusses and the inspector sees one that isn't nailed correctly, you lose
• Claim your discounts. Discounts are available for having a centrally
monitored security system that might come close to offsetting the
monthly monitoring cost, McChristian says.
Have you upgraded your plumbing? Your air conditioning and heating
system? Your electrical wiring? Did you install a new garage door? Claim
Some companies give discounts for replacement of wood siding with siding
made of durable fiber cement, says Robert Norberg of Arden Insurance in
• Check into bundling. Just like the telecommunications companies
hawking discounts when you combine phone, internet and TV service, some
companies offer price breaks by combining home, auto or other insurance
• Only purchase the amount of insurance you need. This will differ
depending on how much money you are willing to spend out of pocket if a
You have to decide on two different deductibles: A hurricane deductible
that typically ranges from 1 percent to 5 percent of the property's
insured value, and the multiperil (non-hurricane) deductible that's
typically a dollar amount, like $500 or $1,000.
Many people think the hurricane deductible is a percentage of the claim,
but it's not, Neal says. So if you have a $300,000 home and a 5 percent
deductible, you'll have to spend $15,000 out of pocket before coverage
kicks in. You'll save money on your premium with the higher deductible,
but make sure you can afford the out-of-pocket expense if you have a
catastrophic storm claim.
You'll have to make a similar choice when deciding how to insure your
contents. Insuring the actual cash value of your contents will cost less
than if you insure for replacement value, but you'll be reimbursed after
damage or theft based on the depreciated value of the items. In most
cases, that won't buy you a new sofa or TV. Insuring for replacement
In Florida, you have the option to drop contents coverage, which means
you are insuring only the structure itself, McChristian says. "Taking
this option might not be worth it in the event of significant damage, so
price it out before deciding," she says.
Neal advises that if you opt to save money with a higher deductible,
roll the savings into a flood insurance policy if you currently are not
required by your lender to carry one. Homeowners policies don't cover
flooding, but nearly half of property owners in areas vulnerable to
storm surge — that's much of coastal Florida — don't bother to carry