It’s true you don’t need to purchase a home insurance policy for a Florida property. However, if you finance through a bank, they require it as a condition for obtaining a mortgage. Overall, it’s a huge benefit to a homeowner. Not only does it protect you from huge financial losses but also covers costs connected to injuries.
Several factors affect an insurance policy’s premiums. Among these is the property’s age. They are especially high if the home you’re interested in was built before 1992 or Hurricane Andrew.
The Destructive Andrew
Before 2017’s Hurricane Irma, Andrew was the most-destructive Atlantic hurricane. Rated a Category 5, the 1992 storm became the costliest to Florida at that time in terms of property damage. When it was done, 70,000 trees were downed in the Everglades while the city of Homestead was completely destroyed.
Home Insurance Chaos
The devastation caused by Hurricane Andrew resulted in the filing of over a half-million insurance claims. Overwhelmed by the influx, nearly a dozen insurance firms went bankrupt, affecting a million policyholders. Seeing the consequences of this on the state’s homeowners, the Florida Legislature created several new funds and agencies to restore safeguards.
Among the actions they took was a tightening of building codes. In 2002, the Florida Building Code voided local regulations and replaced them with statewide rules. The goal was to construct new homes that could withstand the power of future hurricanes.
High Risk Homes
Conversely, pre-1992 homes with certain design features were deemed more susceptible to hurricane damage. Thus, insurance premiums increased. In some situations, a 4-point inspection form is used to record pre-1992 construction as part of a larger home inspection report. Many insurance firms require this document to cover these properties.
Nevertheless, there are still some issues that must be corrected before coverage is granted. For instance, eliminating concrete tiles glued to felt paper or attaching slate tiles at right angles to the roof’s spine.
Other items that increase insurance premiums on pre-1992 homes include:
- Older roofs – especially those comprised of slate tiles. These have an average lifespan of 15 years.
- Aluminum wiring – prone to rust if damaged, resulting in power disruptions.
- Galvanized plumbing – has the potential to corrode from the inside.
- Bad electric panels – can cause electrocution and arcing due to poor construction and minimal insulation.
Lowering the Premiums
Higher premiums for pre-1992/Hurricane Andrew homes aren’t a foregone conclusion. There are ways to lower your costs before you get the front door keys. Foremost, have your home inspected.
Although not required under Florida law, it’s as important as an insurance policy to protect your investment. Further, your mortgage company may require it if they deem the property a high risk. Should the inspector find issues, it will be up to you and the seller to come to an agreement on modifications. If they decline, and you feel the home’s return on investment isn’t worth it, then consider another property.
In the end, reach out to your local home insurance company to get more information as you start a search for a Florida home.
My name is David Rogers, and I’m a licensed realtor who loves to provide high-level service. Please let me know how I can serve you!