How to Reduce Florida Home Insurance Costs

If you’re thinking about buying a home in Southwest Florida, insurance is probably one of the first things on your mind.

There’s a lot of misinformation floating around about homeowners’ insurance and flood insurance in our area. My goal today is to clear up some of that confusion and share a few things that may help you find good coverage at a reasonable cost.

Why have home insurance costs in Florida increased? Since around 2017, and especially after Hurricane Ian hit Southwest Florida in September 2022, homeowners’ insurance premiums have gone up significantly. On average, many homeowners have seen increases of around 30 to 35 percent.

At the same time, it’s important to remember that property values have also risen dramatically. In many cases, home values have increased by about 30% as well, even after the market correction we’ve seen over the past 18 to 24 months.

Still, higher insurance premiums are frustrating. So let’s talk about a few practical steps that may help lower your costs.

1. Get a wind mitigation report. One of the most helpful things you can do is have a wind mitigation report completed on your property.

Wind mitigation focuses mainly on the roof and how well the home is built to withstand strong winds. Inspectors look at things like roofing materials, water barriers, nail patterns, and the strapping or tie-downs used to secure the structure.

Insurance companies review this information when calculating your premiums. If your home has the right features in place, a wind mitigation report can potentially save you a significant amount on homeowners’ insurance.

2. Complete a four-point inspection. Another important inspection is called a four-point inspection. This evaluates four major components of a home:

• Roof
• Air conditioning system
• Plumbing
• Electrical system

If these systems are in good condition, insurance companies view the property as less risky to insure. If issues are found, repairing them and notifying your insurance company may help lower your insurance quote.

Many lenders will require a four-point inspection when purchasing a home, so it’s a good step to take early in the process.

3. Install impact-resistant protection. Homes that have impact-resistant windows, doors, or hurricane shutters may qualify for lower insurance premiums. These features help protect the home from storm damage, which reduces the risk insurance companies take on when providing coverage.

4. Understand location and flood zones. Location plays a major role in both homeowners’ insurance and flood insurance costs. Generally speaking, the farther you are from the water, the lower your insurance premiums may be. Homes outside of flood zones often have lower flood insurance costs.

That said, much of Southwest Florida falls within some type of flood zone. The highest risk areas are typically A and V zones, while B and C zones are considered low to moderate risk. The higher the risk zone, the higher the insurance cost is likely to be.

What determines flood insurance costs? Flood insurance is widely available in Southwest Florida, and many people are surprised to learn that it can still be affordable.

The price depends on several factors, including:

• Distance from water
• Cost to rebuild the home
• Age of the home
• Type of foundation

For example, a 50-year-old home located on a Gulf access canal will usually have much higher flood insurance costs than a newer home located many miles inland.

Why do I need to get an updated elevation certificate? If your property requires flood insurance, having an elevation certificate can be very helpful.

Elevation standards have changed over time. A new elevation certificate may show that your home sits higher than previously documented. In some cases, that could reduce your flood insurance cost or even eliminate the requirement for coverage.

Ask about transferable flood insurance. If you’re buying a home that already has flood insurance, ask the current owner whether the policy is transferable.

In many cases, flood insurance policies can be transferred to the new owner. This may result in significantly lower premiums compared to purchasing a brand-new policy.

Shop around for coverage. Different insurance companies offer different policies and coverage levels. Comparing multiple options can help you find the best fit for your property and budget.

I’m not an insurance agent, but after working in this market for more than 25 years, I do know a few trusted insurance professionals who can help guide you through the process.

If you have questions about real estate or insurance here in Southwest Florida, feel free to schedule a free strategy call with me. I would be happy to walk you through the process. Reach out by calling (239) 444-6100 or sending a message to cory@thecorylauergroup.com. I’m always happy to point you in the right direction.