Your home insurance options are growing, thanks to a healthier market

Article Courtesy of The Orlando Sentinel

By Ron Hurtibise    

Published September 27, 2018


Private market insurers are starting to expand options available to Florida homeowners — and that’s a sign the state’s home insurance market is healthier than ever, experts say.

Florida homeowners are no longer limited by hurricane-weary companies to bare-bones coverage choices. Innovations include:

Offering optional coverage for luxury and recreational items and warranty plans for electrical equipment in homes.
Reducing deductibles every year when customers don’t file claims.

Bundling flood and homeowner insurance under a single-deductible policy.

Insurers “have a lot more capability to do these things because reinsurance” — that is, insurance that insurers have to buy to make sure they can pay claims after a catastrophe — “is more affordable,” said Jeff Grady, president and CEO of the Florida Association of Insurance Agents.

Not having to pay hurricane claims during the decade between 2005 and 2016 helped companies grow healthier as well, he said. Now, “they’re not just hanging on by their fingernails. They’re looking for good business and trying to dress up their product a bit.”

As they get more profitable, home insurers in Florida are starting to roll out more optional coverage choices and add perks to lure customers away from competitors.


Below are some recent innovations introduced by private-market insurers in Florida. Some options will increase the price of a standard policy, while others will be included in the price. It’s important to note that some insurers remain selective about where they do business. Because of high levels of claims litigation in the tricounty region, some companies don’t write coverage in certain parts of the region.

“Some of this stuff has been developing in other markets for a while,” Grady said, “but we’re among the last to see it because of how skittish insurers are about Florida.”

Here are some of what companies are offering in addition to their standard homeowner policies:

Add-on coverage
More companies are offering optional coverage for items that standard policies don’t cover or cover with low maximum payouts. Florida Peninsula Insurance Co., for example, offers optional coverage for screen rooms, carports and awnings; golf carts; jewelry and furs; identity theft expenses; silverware; flood and more.

St. Johns Insurance Co. combines what some companies offer as individual endorsements and offers them as its “Shield” and “Shield+” plans. The plans cover theft of jewelry, firearms and silverware, plus refrigerated property, on- and off-premises business property, lock replacement, credit card forgery, medical payments, outboard watercraft, personal liability and even a fire department services charge.

Deferred deductible payments
Heritage Insurance is among a handful of companies that use what’s called a managed repair network model. That means that instead of handing over a check and letting the customer select a repair contractor, the company dispatches its own repair team, giving it more control of cost overruns and reducing the potential for lawsuits.

Heritage offers a Platinum Preferred Savings Program that allows customers to defer paying their deductible until after the repair work is complete. Heritage also gives Platinum members a 10 percent discount on their deductibles and a three-year warranty on labor and materials.

Vanishing deductible
Offered as a “stepdown deductible” by Frontline Insurance, this program rewards customers who file no claims by reducing the deductible each year. After a year with no claim, the deductible is reduced by 5 percent. The next year it goes down 20 percent, then 40 percent, then 60 percent, and then 80 percent until it disappears after the sixth year.

Home equipment protection
At least five companies offer coverage against failure of key home equipment such as air-conditioning systems, major kitchen appliances, hot water heaters, pool equipment, computers and tablets, TVs and receivers, laundry machines, electrical distribution boxes, solar panels and more.

More like a standalone home warranty plan, the coverage goes beyond typical product warranties or maintenance contracts and covers losses from line surges, short circuits, electric arching, owner error and mechanical breakdown. It can cost as little as $50 a year, Dulce Suarez-Resnick, an agent with Miami-based NCF Insurance Associates.

The product also covers whole-home generators that many Florida homeowners purchased after enduring long power outages after storms in 2004 and 2005. Companies offering equipment breakdown coverage include Anchor Property and Casualty, Universal North America (not to be confused with Florida market leader Universal Property & Casualty), SafePoint Insurance, Prepared Insurance and United Property and Casualty.

Flood insurance endorsement
Security First Insurance was the first Florida-based company to underwrite its own flood insurance coverage and offer it to customers as an endorsement, saving them the hassle of buying a separate policy through the National Flood Insurance Program or another insurer. If flooding occurs at the same time as damage covered by a standard homeowner policy, Security First handles it as a single claim with a single deductible, as opposed to forcing the homeowner to file a separate claim with a flood insurer.

In addition to coverage for excessive rainfall, storm surge and overflowing pools, the company includes backup coverage for damage caused by water that backs up through sewers and drains or overflows from a sump.

In recent years, other companies have begun to package flood insurance with their homeowner policies, by underwriting coverage themselves or by piggybacking on the National Flood Insurance Program. TypTap, a spinoff company of Homeowners Choice Insurance, in 2016 became the first insurer in the state licensed solely for flood insurance. Some companies also sell “excess” coverage over the National Flood Insurance Program’s $250,000 limit backed by surplus carriers such as Chubb Personal Insurance.

Web extras
Security First has also made its website easier to use, offering simple online quotes and a downloadable storm-tracker app, as well as a guide to help house-hunters look for features that will keep their insurance costs lower.

‘So many visions and competitors’
Many of the carriers now expanding their product offerings were created to help depopulate state-run Citizens Property Insurance Co., the “insurer of last resort” that covered 1.4 million homeowners who couldn’t find coverage on the private market in 2012 and now insures about one-third as many. Because the state allowed the private carriers to transfer customers out of Citizens without first getting their permission, the companies were required to provide identical coverage. This resulted in the companies seeming “cookie-cutter,” Suarez-Resnick said .

But in the past 10 years, the companies started developing voluntary products for customers who weren’t limited to Citizens “and started adding bells and whistles to differentiate themselves,” Suarez-Resnick said.

The innovations are also a sign that consumers are regaining leverage in the market, said Jay Neal, president and CEO of Florida Association for Insurance Reform, a Fort Lauderdale-based insurance industry watchdog group.

“The exciting thing about this market is there are so many visions and competitors,” he said. “With competition comes innovation. And if policyholders aren’t happy, they’re going to leave and go to a competitor.”

Most insurers now offer additional coverage beyond what’s covered in their standard policies, Suarez-Resnick said, but agents often don’t mention them and customers don’t always ask — especially in South Florida where insurance costs three times the national average — because they are focusing on keeping costs as low as possible.

Consumers who want to explore available options, including switching carriers in the middle of their terms, should consider speaking with an independent agent with access to large numbers of insurers, said David Thompson, an analyst for the agents association.

“Consumers should make it clear that they are not buying based just on price, and that they are willing to pay for the best coverage,” he said. “They should start out asking for the best coverage available, then buy based on coverage and price.”