Looking For A Lower Insurance Rate? In Miami, You Have Tough Options. Here’s Some Advice

Shocked by the sharp increase in their premiums, many Florida homeowners might be considering finding an insurance company willing to give them a better rate.

But there’s little chance of finding one, especially if they live in the southeastern part of the state. Half a dozen independent insurance agents consulted by the Miami Herald said that only a handful of insurance companies are willing to write new policies in the region, and new ones are focusing efforts on policies that are being handed over by the state-created Citizens Insurance.

“The market is very difficult right now. We have a crisis, and the tri-county area is where the situation is most difficult,” said Darling Ribalta, owner of Ribalta Insurance Corp., an independent agency based in Pembroke Pines that helps homeowners find coverage. “Right now, for people who are in the three counties, there is very little chance of being able to get a better offer from another company. There are practically very few companies writing new policies, and those that are here are at a stage evaluating whether they are going to want to continue writing policies or not for all the losses they have suffered over the years.”

What Are Homeowners In South Florida Paying For Insurance?

Range: South Florida homeowners are paying an average of $5,000 $to 12,000 a year, depending on the size of the dwelling, how near it is to the water, how extensive their coverage is and, increasingly, how new the roof is, agents said.

What’s Ahead: These rates are unlikely to come down soon, according to a recent report from analysts at Karen Clark & Co, a catastrophe modeling firm. It said global warming is leading to more severe hurricanes and that warming waters in the Gulf of Mexico are producing more losses in the state from hail, tornadoes and wind. “These factors will continue to influence future homeowner premiums, and these costs are unlikely to decrease,” the report said.

Fewer Insurance Companies Seeking Business

Higher Risk: What makes matters worse for homeowners in South Florida? Fewer insurance companies competing for your business, with some deciding to leave the state citing higher risk and excessive claim litigations while others fall into bankruptcy. Limits on choice: That mean South Florida property owners find little room to shop around for a better rate.

What Can Homeowner Do To Lower Their Premiums?

Homeowners can do a few things to help lower their monthly payments — although some of these might require some tough decisions:

Review Your Policy: Start with reviewing the policy with your insurance agent. “Whatever options there are will only be discovered when the client sits down with the agent to determine the coverage they really need. It all depends on the circumstances of each client,” Ribalta said.

Deductibles: One of the quickest ways homeowners can lower their policy costs right away is to increase their deductible. Typically, a Florida home policy has two deductibles. One is a standard deductible for most perils, such as fire. The other is a windstorm deductible, related to the coverage of storms with names designated by the National Hurricane Center, such as hurricanes and tropical storms.

Out Of Pocket Costs: Increasing your deductible could have a significant impact on your rate, but there’s a downside to this option. “You will be responsible for paying more out of pocket if you suffer a loss. Higher deductible means more out of pocket, so you have to kind of weigh the pros and the cons,” said Mark Friedlander, director of corporate communications for the Insurance Information Institute. Flood insurance: Another option for is canceling your flood coverage in areas that aren’t in a flood zone. Agents don’t recommend this, regardless of location.

Hurricane Protection

An important factor determining rates in South Florida is the capacity of a home to withstand a hurricane.

Discounts: Insurance companies are required by law to give discounts to owners who have taken steps to protect their homes from severe winds through improvements. Called wind mitigation credits, these discounts are given after the dwelling has been examined by a certified inspector. This inspection is optional and separate from the lender normally required “four-point” inspection, but is worth doing, given that a positive rating could lead to significant savings.

Roof: An inspector, which must be hired by the owner, would typically inspect the condition of the roof — its shape, covering and its connection to the walls, as well as the conditions of the house’s openings, such as windows and doors.

Elsewhere in Florida: Accumulating wind mitigation credits, which at times could mean making certain improvements to the home, can help owners lower their rates in South Florida, but not as much as other areas in Florida, said Randy Marzullo, agent for the firm We Insure, working out of Coral Gables. Rates in Orlando are about a third of what homeowners are paying in Miami-Dade, even in cases when South Florida homeowners have done all that is possible to protect their homes from hurricanes and Central Florida homeowners have not, Marzullo said.


Source: Miami Herald

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