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I'm looking at purchasing in the Sarasota/Bradenton area. Found a property and was told that because of the property's age, Citizens was the only option for homeowners insurance. I was also told that the price could vary, depending on which agent I used, but that it would be through Citizens.
Got a quote for $2100 for a 900 sq ft home due to age and, when coupled with flood insurance, the cost was over $3,600/year. That's more than I pay for homeowners insurance for my 1200 sq ft home, my daughter's 1000 sq ft home and my 500 sq ft cabin on 5 acres combined here in Massachusetts. And, people say that our insurance costs are among the highest in the country!
Can someone give me a quick tutorial on insurance in Florida. Are there other options than Citizens? Are there competitive rates between companies?
If I purchase a villa or a condo, will I face the same sticker shock?
Most major named insurance companies do not offer home insurance in Florida. Insurance companies that do offer insurance usually do not offer insurance to homes built prior to 1994. Your only option is citizens. Be aware that no matter where you get your insurance, the policy 'deductible' is 2% and based on the cost to rebuild a totally destroyed home. [rebuild cost of $200,000 equals $4000 deductible] No home insurance includes flood coverage. The separate policy rate is determined by what flood zone the home is located.
Building insurance for a condo or a villa community is paid as part of the H.O.A. fees. The fee usually includes exterior walls/roof, grounds maint. private road maint., pool upkeep, cable TV, community liability. But you will probabily also have to purchase a 'fire/contents/liability policy for your unit.
Each individual property can vary as far as homeowners insurance. My home is under $1000 year but is newer.
You have to get a quote on each and every home you are considering. Als there are some discounts available due to windstorm mitigation and an inspection ID's which discounts that home gets...such as hip roof, roof strapping and many other items.
As far as flood, the required flood elevation of the property (per FEMA rules) is compared agains the ACTUAL elevation of the home. If the home is below FEMA rules required elevation, Flood Insurance will be outragous. For homes that are above the required elevation, you get a flood discount for each foot above the required elevation.
Some tips for cheaper insurance
1) Shop around. Flood insurance, though, is supposed to be priced the same no matter which company sells it since FEMA is the carrier for all flood policies. But wind and normal insurance can vary greatly. shop, shop, shop.
2) To decrease rates, see about increasing your deductible. There is a separate one for windstorm (hurricane) and it is a percentage. It can go as high as 10%. You can choose 5%. the discounts get real nice for the higher percentages. I have a 5% deductible and if my policy increases a bunch I will go to 10% as needed.
3) Consider removint coverage for contents if you are comfortable with this risk. Flood insurance allows this and citizens allows it too I am pretty sure. If you don't want to remove contents coverage or if the carrier won't allow you to remove it, see about getting "actual cash value" (used valued) versus full replacement cost(brand new items). If you have a mortgage, they only care whether the home is insured; they don't care if your furniture and clothing and electronics are insured.
Homes with hip roofs will have cheaper wind insurance. I think block homes are cheaper to insure than wood homes.
You will get a more normal experience (reasonable competitive rates, etc) if you go with a newer home, and stay out of a flood zone.
Each time a major storm hits FL "they" look at the damage and how it can be avoided in the future by changes to the building codes. With each of these new sets of building codes you get stronger houses that are more likely to still be standing after a major storm. Insurance in FL is all based around which set of codes your home was built under (or what percentage of the code your home meets). I think the oldest is like '74 or so, and then another in '94, and '02, etc. An insurance agent could probably give you the exact cut off years.
These codes also play a part when remodeling a house. For instance when replacing the windows in our house we had to meet the current building code. This meant impact resistant windows (or shutters) along with newer installation methods were required in order to pass the inspection. This can have a dramatic effect on the cost and complexity of remodeling and older home.
This is my opinion, based on my experience with the last 9 years on and off with Citizens and an old house in FL:
You'll pretty much get the same quote no matter what agency you use since the rate is set by Citizens. You can certainly call around but we got the same quote everywhere. Flood seems to be the same everywhere as well. Citizens will also require full replacement value coverage, which could be far more than the mortgaged amount of the house (in our case the insured value was almost twice the actual value / mortgage amount).
If you do find someone besides Citizens to cover an old house, don't count on them continuing that coverage. Every year more and more companies drop coverage for older homes in FL, especially those close to the water. Also expect rates to increase yearly. We have gotten to the point where anything less than a $500 increase between flood and homeowners is a good year.
You can get some inspections that may help reduce the cost, but these may have been done already so you'd have to check with the seller / insurer on those. We also looked at having some work done to bring our house to a newer code standard, but the cost was far beyond what we would have just spent to buy a new house to start with.
Also be aware that the FL legislature voted last month to allow unregulated out of state companies to pick up Citizens policies (in an attempt to help stabilize Citizens). This means that if you are picked up by one of these companies, you won't necessarily be protected by the state if they fold after a major storm, and that they don't have to meet the same requirements as companies that are registered as FL providers (like price limits, etc). Just do your research if you get a notice stating that a company wants to take your policy from the Citizens pool.
Long story short; there is no way that I'd ever buy an old house in FL again. Any money saved on buying an old house will be lost on insurance. My combined flood and homeowners insurance have increased by just over 700% in 9 years.
You will get a more normal experience (reasonable competitive rates, etc) if you go with a newer home, and stay out of a flood zone.
I think you will be OK in a flood zone, depending on the elevation of the home and the flood zone itself. My flood insurance is under $250/yr and I am in a flood zone. Keep in mind, many of the properties in this area are in a flood zone of some sort. Homes built since the late 1970s typically have been built to FEMA's flood zone elevations. But you have to be sure and check for each individual property before you buy. There were recent discussions about FEMA changing the flood zones in the area. Not sure if this occurred. With this, any existing home that met prior flood elevation rules but doesn't meet new elevation rules would be "grandfathered" in. With these new maps, some homes that were not in flood zones will get added, and vice versa.
If I was buying, I would add an addendum to the contract that IF the home is located in a flood zone, all living areas of the home must be at or above FEMA's required Base Flood Elevation(BFE) for that property(FEMA publishes Flood Zone maps and every property falls into one of them). Else I would walk away from that home if it was below BFE. This is determined by a survey and providing an Elevation Certificate. This certificate shows the FEMA required elevation, the flood zone itself, and the elevation of the home. At the very least, I would want to see a copy of the current owner's elevation certificate.
I think you will be OK in a flood zone, depending on the elevation of the home and the flood zone itself. My flood insurance is under $250/yr and I am in a flood zone. Keep in mind, many of the properties in this area are in a flood zone of some sort. Homes built since the late 1970s typically have been built to FEMA's flood zone elevations. But you have to be sure and check for each individual property before you buy. There were recent discussions about FEMA changing the flood zones in the area. Not sure if this occurred. With this, any existing home that met prior flood elevation rules but doesn't meet new elevation rules would be "grandfathered" in. With these new maps, some homes that were not in flood zones will get added, and vice versa.
If I was buying, I would add an addendum to the contract that IF the home is located in a flood zone, all living areas of the home must be at or above FEMA's required Base Flood Elevation(BFE) for that property(FEMA publishes Flood Zone maps and every property falls into one of them). Else I would walk away from that home if it was below BFE. This is determined by a survey and providing an Elevation Certificate. This certificate shows the FEMA required elevation, the flood zone itself, and the elevation of the home. At the very least, I would want to see a copy of the current owner's elevation certificate.
Very good point. Being in a flood zone isn't the end of the world, it's about the elevation. For instance we are in an A10 zone and the house (the actual first level floor) is at about 8 Ft above sea level. I think the best rate is at something like 11 or 12 (it could be more).
Of course the old houses were all built below that level.
you might want to check the post relating to citizens being able to pick up your insurance. As far as I know the law talks about your being able to go to another company, and not about the company picking up your policy against your will.
you might want to check the post relating to citizens being able to pick up your insurance. As far as I know the law talks about your being able to go to another company, and not about the company picking up your policy against your will.
They can't take you without you agreeing to it. You get a notice and are given a choice. Sometimes you can actually get a better deal (UCP gave us one year of a better rate, then raised it the next year dramatically so we went back to Citizens).
My warning is just that prior to last month, you could only be picked up by normal FL insurers, now you can be picked up by a different category of company that can't normally do business here, and some folks might not realize that when they get the notice.
My warning is just that prior to last month, you could only be picked up by normal FL insurers, now you can be picked up by a different category of company that can't normally do business here, and some folks might not realize that when they get the notice.
Didn't that law get squashed/thrown away for regular homes? I think it was up for discussion and was expected to pass at the most recent FL state session, but instead congress decided against it at the last minute? I think they passed a new bill related to condo buildings valued at over $1 million. I could be wrong.
Didn't that law get squashed/thrown away for regular homes? I think it was up for discussion and was expected to pass at the most recent FL state session, but instead congress decided against it at the last minute? I think they passed a new bill related to condo buildings valued at over $1 million. I could be wrong.
Eh, you may be right. The house passed it, but it looks like the senate either hasn't voted on it yet, or killed it (They delayed in in late February). Can't find any definitive info on the senates part.
Since we moved I don't really keep up with FL news that much so I haven't paid that much attention.
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