Your home insurance options are growing, thanks
to a healthier market
Article Courtesy of The Orlando Sentinel
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.
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
Bundling flood and homeowner insurance under a
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:
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.
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
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
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
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
‘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
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
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
“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
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.”