[kgiadro]

Is Homeowners Insurance mandatory in Florida. Can an insurance company drop yor coversage if you want to drastically reduce it?

[sware2cod]

Originally Posted by kgiadro

Is Homeowners Insurance mandatory in Florida?

The state does not require anyone to have homeowners insurance. However, mortgage companies require it.

[blueridgerider]

Insurance companies require those who are mortgage free to also carry insurance. You will find it harder to purchase insurance if you don't. Citizens may be the only one available and you'd have a 30 day wait period. You must purchase insurance coverage for replacement (rebuild) value of the dwelling.

[Mike1306]

Originally Posted by blueridgerider

Insurance companies require those who are mortgage free to also carry insurance. You will find it harder to purchase insurance if you don't. Citizens may be the only one available and you'd have a 30 day wait period. You must purchase insurance coverage for replacement (rebuild) value of the dwelling.

You can not be forced to buy insurance if you are mortgage free. Yes if you don't have insurance for a while and then all of a sudden decide you want insurance it will be harder to get but the same would be true anywhere else I would think.

[City__Datarer]

For anyone looking at condos, single-family homes in HOAs, or mobile home co-ops, I suggest researching this carefully.

If you look at some HOA associations' online documents, they will state that owners are required to maintain insurance (so even a person who is mortgage free would still be required to carry insurance). For at least one association I looked into, the board seemed very actively involved in checking on this (I'm basing this on their meeting minutes posted online; they were identifying homeowners who were not in compliance with providing proof of insurance and stating the follow-up action being taken)--not sure if this is common or not. (And I'm not saying it's bad, just something to be aware of.)

Also (and I do personally think this was bad), my understanding is a few years back Florida passed a law (disclaimer: I'm not a real estate or insurance professional or a lawyer and am not giving legal advice) that condo associations were required to ensure that individual unit owners carry unit insurance (this would be in addition to the insurance on grounds and buildings already carried by the association). Prior to this law, with condos, my understanding was that even if you had a mortgage, you did not have to carry unit insurance unless your individual lender or your individual association happened to require it. So this was a major change for any condo owners who had been budgeting their expenses with the expectation that they would have the option to not carry unit insurance if/when they were mortgage free.

I didn't keep up on changing law on this as I haven't owned a condo for a few years--don't know if this was ever overturned or rescinded or is still a requirement (maybe someone else can speak to current status).

[bigh110]

Originally Posted by blueridgerider

Insurance companies require those who are mortgage free to also carry insurance. You will find it harder to purchase insurance if you don't. Citizens may be the only one available and you'd have a 30 day wait period. You must purchase insurance coverage for replacement (rebuild) value of the dwelling.

This is a completely false statement if you own a single family home with no HOA in Florida and you hold the deed with no mortgage/liens. you are not required to have any insurance at all. If you own a home in Florida depending on where its at you maybe required to carry three different insurance policies by your mortgage company. Citizens which is is a not-for-profit, tax-exempt government corporation will only provide you Windstorm insurance if no one else will they are mandated by the state to provide coverage to satisfy the requirements of the mortgage holder. They are know as a "insurer of last resort"
Insurance number one is always required if you hold a mortgage and even if I owned my house I personally would not go without this insurance. its the normal homeowners policy that covers you if someone gets hurt on your property or say your house burns down. number two insurance is FEMA flood insurance (It covers flood only)and its only required by most mortgage companies if you are in certain flood zones close to an ocean or bay usually within a certain amount of miles of the water. If you are on an island/barrier island it is going to be required. insurance number three is windstorm insurance which is required by almost all mortgage companies no matter where your house is locate in the great state of Florida. Citizens only offers Windstorm policies you cannot get flood or regular homeowners through citizens. If I am not mistaken only FEMA offers flood insurance in Florida.
Now for the Good news You only need to carry enough coverage to satisfy the amount you own the mortgage company on the lien When you buy Windstorm or FEMA flood insurance NOT THE COST TO REBUILD THE HOUSE. That not saying you can't insure for the cost to rebuild the house but its not REQUIRED.
Please note most private (not government) companies providing you regular (#1) homeowners will require you carry enough insurance to rebuild the house in case of fire or some other unforeseen damage NOT related to wind or flood.

You ask how I know this I own a house in Florida Keys (bought in 2010) being that it is on an island I am required to have all three policies in effect. I have Llyods of London for normal homowners insurance #1. FEMA for Insurance #2 and Citizens for insurance #3 I carry 111k for insurances #2 and #3 because at settlement that was my remaining/outstanding mortgage balance. In reality it would cost at least $180,000 to replace my house if it was destroyed. The cost Citizens windstorm varies greatly due to the construction of the house/year built. They send an inspector out to verify and or discontinue all you discounts. Certain things like hurricane shutters impact resistant windows and metal roofs will discount your policy cost. now for the Bad I dont have any discounts because my house was built in 1967 and here is what I pay for my insurance #1 is $752 #2(fema) $1278 #3 $2398 (2% deductible) and remember that is just for $111,000 of dwelling coverage!! so you can imagine if you had a 300k mortgage with no discounts!!!!!
as a side note when you purchase insurance in Florida it must be done through a broker unlike in PA where i was able to call the insurance company directly and i am sure this adds tot he cost.

[blueridgerider]

"Insurance companies require those who are mortgage free to also carry insurance. You will find it harder to purchase insurance if you don't."

The above statement has to do with eligibility requirements when purchasing new insurance. You can contact your local agent and find out this is true. Those who don't have insurance on their home, when hurricane season begins, think twice about wishing they had coverage. As an insurance carrier, why would I want to insure you at that time of year when you didn't bother to insure yourself remainder of year? If a standard carrier will not insure you then your options would be Citizens, yes they do write homeowners insurance thru out the State of FL if you have been rejected by other carriers as they are the insuror of last resort. Excess and surplus lines companies are also available. I was not talking about flood nor the Citizens windstorm program only homeowners coverages. Depending on your location to the coast most homeowners insurance carriers cover windstorm and named hurricane coverage on the same policy.

[Mike1306]

Originally Posted by blueridgerider

"Insurance companies require those who are mortgage free to also carry insurance. You will find it harder to purchase insurance if you don't."

The above statement has to do with eligibility requirements when purchasing new insurance. You can contact your local agent and find out this is true. Those who don't have insurance on their home, when hurricane season begins, think twice about wishing they had coverage. As an insurance carrier, why would I want to insure you at that time of year when you didn't bother to insure yourself remainder of year? If a standard carrier will not insure you then your options would be Citizens, yes they do write homeowners insurance thru out the State of FL if you have been rejected by other carriers as they are the insuror of last resort. Excess and surplus lines companies are also available. I was not talking about flood nor the Citizens windstorm program only homeowners coverages. Depending on your location to the coast most homeowners insurance carriers cover windstorm and named hurricane coverage on the same policy.

The bolded part is what people are saying is untrue. Yes, if you previously had no insurance it will probably cost more and be harder to get if you decide to all of a sudden try and get a policy but you can not be forced to have insurance on a SF home if you have no mortgage.

[Rabflmom]

Originally Posted by blueridgerider

"Insurance companies require those who are mortgage free to also carry insurance. You will find it harder to purchase insurance if you don't."

The above statement has to do with eligibility requirements when purchasing new insurance. You can contact your local agent and find out this is true. Those who don't have insurance on their home, when hurricane season begins, think twice about wishing they had coverage. As an insurance carrier, why would I want to insure you at that time of year when you didn't bother to insure yourself remainder of year? If a standard carrier will not insure you then your options would be Citizens, yes they do write homeowners insurance thru out the State of FL if you have been rejected by other carriers as they are the insuror of last resort. Excess and surplus lines companies are also available. I was not talking about flood nor the Citizens windstorm program only homeowners coverages. Depending on your location to the coast most homeowners insurance carriers cover windstorm and named hurricane coverage on the same policy.

Actually....if there is a named storm out in the ocean, NO ONE in Florida can purchase homeowners' insurance. Even if you are supposed to close on a house, you can't do it because the insurance can not be added then and the mortgage company will not let you close. That is why people scramble to close prior to a storm being named .

We have homeowners and it does have the hurricane coverage, sink hole, etcall on one policy. We also made sure that our insurance is enough for the tear down and the rebuild because we have seen people who were not fully insured be able to rebuild once the tear down and clean up of the lot were done after a storm.

Another thing we saw on the coast.....condo complexes not being rebuilt after the hurricanes of 2004 because the insurance was not enough. Some claimed too many rental units in the complex was the problem and the owners not paying the insurance premiums.
Many people in single family homes had to fight to get the money from insurance companies, too. Took a year or 2 for some to get repairs made. We had Nationwide and they were out and paid quickly. Wonderful to deal with......but then they cancelled all of the policies on the coast and left the state . The Big well known companies have pretty much deserted Florida and have left us being insured by companies you have never heard of till you start looking for insurance. Hopefully if we do get hit by a hurricane they will be there for us. Hopefully the hurricanes will stay away, too.

[Mathguy]

Just enjoy Citizens while you can. They've managed to ride a wave of non-hurricane years and are now, by far, the biggest insurance risk in FL.

When they get smacked though, it won't just be their insurance rates that rise or even just homeowners. THey will have assessments against almost all insurance policies in the state which will raise costs on auto, professional liability etc etc.....of course finding it's way into your wallent directly and indirectly via higher merchant prices.