High Priced Florida Home Insurance is Going up Again

Depending on the location of your home and the company you are with, your Florida home insurance is going to increase this year by up to 15%.  However that might pale in comparison to the discounts you could lose this year that you presently enjoy from your Florida home insurance company.

Presently, Florida homeowners like you get the benefit of wind mitigation discounts for multiple home features that help make your home more resistant to hurricanes.  Home insurance companies are required to give you this discount under Florida law and a specific formula must be used to calculate it.  It includes discounts for home features like the roof shape, system for removing water, roof to wall attachment methods, and whether your home has hurricane shutters among other things.

Home insurance consumers in Florida have enjoyed these discounts which can be up to 50% of the wind premium on a home.  However, homeowners sometimes are disappointed with those discounts as well.  One homeowner who was showcased in the St. Petersburg Times invested $5,225 to strengthen the garage door and for hurricane shutters on his home in Spring Hill, Florida.  He was very upset to find out that his $5,225 investment would only give him a discount of $16.11!  Other homeowners in Florida have saved a lot more.

Started in 2002 along with improvements to the Florida building code, these wind mitigation discounts were an important step in the process to deliver lower Florida home insurance rates to those with homes less likely to sustain serious damage in a Florida hurricane.  The State of Florida doubled those discounts in 2006 to give some rate relief after the big hurricane seasons of 2004 and 2005.

At the moment with the approach of the 2010 Florida legislative session, home insurance companies are asking legislatures to reduce some of those discounts.  In some areas the companies might have a point.  To begin with, these does appear to be some fraud connected with those discounts.  This fraud can be the result of homeowners misrepresentations and also due to errors in the findings from the home inspection.  Regardless, it could result in homes receiving discounts that aren’t appropriate.  Florida home insurance companies also point out that doubling these discounts in 2006 was more about currying favor with voters rather than coming up with a scientific way to calculate mitigation discounts based on how your home would actually perform during a hurricane.

Some home insurance companies are ordering new inspections to get a better picture on what’s really been done to harden your home.  If a re-inspection on your home produces discrepancies, you might lose some of your discounts and face a massive increase in your Florida homeowners insurance premiums.

As a homeowner, if these discounts were reduced, you would take a major hit on the cost of your Florida home insurance.  And this would occur during one of the poorest economies of our lifetime. For some homeowners in Florida, losing or reducing those mitigation discounts would result in a massive increase in premium costs.

This is a critical development that all Florida homeowners should be following.  Even slight changes to the mitigation discounts could cause massive increases in Florida home insurance premiums that will make the rate increases already approved look like small change!

Michael Letcher is a Fortune 500 executive who offers an on-line consumer database to help you find affordable Tampa homeowners insurance.  Get his free newsletter and learn about affordable Tampa home insurance at =>


Tags: , , ,

%d bloggers like this: