Get Cheap Florida Home Insurance in a Confusing Market

The Florida home insurance crisis just won’t go away.

Even though Florida has been mostly hurricane free the past three years, new clouds are forming on the horizon as many Florida insurance companies may look to raise rates.  And if they don’t get the rates that they want, you should expect them to start dropping and cancelling policies again.

State Farm Insurance Florida is leading the way on this.  After Florida recently rejected the company’s 47% rate increase, State Farm Insurance FL  is appealing that decision in court.  You should expect other companies to follow the lead of State Farm Florida.

Prior to Hurricane Andrew in 1992 it was easy to find homeowners insurance in Florida.  It was simply a matter of picking up the phone book and calling your nearest agent.  There were hundreds of companies who wanted your business.

That kind of Florida property insurance market is long gone – replaced today by a dysfunctional market where less than 40 companies are actively writing any new business at any time in the state.  And unlike the old days where companies had large surpluses and deep multinational parents to help absorb hurricane claims, most of the home insurance companies still active in the market are very small, Florida based companies.

Many of these Florida based companies just opened their doors for business during the past three years.  As a result, there is a lot of concern about many of these companies being undercapitalized and lacking in post hurricane claim processing experience – a potentially lethal combination that could lead to long delays in getting claims paid after a Florida hurricane.

In this brave new world of smaller, newer, lightly funded Florida home insurance companies, shopping for insurance the old way just won’t work anymore.  As a smart shopper, you have to change the way you shop for insurance to be successful in today’s Florida property insurance market.

Here’s how you can be a smart consumer and find affordable Florida home insurance:

Don’t use a captive Florida insurance agent that only represents a limited number of companies.  Instead use an independent agent that represents multiple companies that will allow the agent to present you with many options.

Don’t work with only one independent agent.  Work with several.  Why?  Because a single agent doesn’t represent all of the companies still writing new business in today’s Florida insurance market.

Find out the names of the Florida home insurance companies that use a general agent or write policies directly without using an independent agent network.  This is significant because some companies have cut costs by eliminating insurance agent commissions.  If you pursue this, make sure you are familiar with every line of coverage on your current policy because you won’t have the benefit of the personalized service of an independent agent.  You’ll have more choices this way, but you will be on your own.

Find out the financial ratings of each of the companies you are considering.  Don’t select a company solely based on a lower price.  You have to find out how much surplus each company has on hand to pay their claims when they happen.

Ask your agent about the company’s risk diversification.  How many policies does the company have in Florida?  Where are their policies situated?  How are they distributed across the State of Florida?  Are they reasonably spread out across the state or are they primarily located in the hurricane prone areas of South Florida?

Find out the number of years the company has been in business, and whether they have any prior experience with Florida hurricane claims.  You don’t want your claim to be “on the job training” for a brand new company.  Check with your agent to find out the history of complaints filed against the company.

In this market, your goal is to create as much competition for your policy as possible.  After you’ve received quotes from multiple agents and companies its time to narrow the field.  Don’t make your decision on price alone.  Make sure the coverage from multiple companies is identical.  After you’ve looked at the coverage, narrow the field further based on the financials and customer service history of each company.

Give serious consideration to paying more for a policy from a company that has more surplus, stronger financials, has been in business longer, and has fewer complaints in its history.

Last but not least – don’t allow your policy to be placed in Florida’s state run carrier of last resort – Citizens Property Insurance Corporation unless you’ve exhausted all of your private company options.

By following these steps you’ll create competition for your Florida homeowners insurance policy and you’ll be getting the most that you can for your insurance dollar.


Michael Letcher is a former Fortune 500 executive and is a licensed CPA.  His on line guide can help you get affordable South Florida homeowners insurance.  Find out the secrets of the Florida property insurance market in his free newsletter by visiting =>


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