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Homeowner's Insurance Dragging Down Your Retirement Plan?

February 05, 2024

          Over the past few years, Homeowner's Insurance rates in Florida have skyrocketed, consuming a huge percentage of your retirement income. I have had clients call me who were shocked by their renewal rates. 

          The average cost of homeowner's insurance in Florida is 3 and half times the national average* and many Floridians have seen their insurance premiums increase by 40% in just one year alone! But why? https://www.npr.org/2023/10/26/1208590263/florida-homeowners-insurance-soaring-expensive

          Well, there are a lot of reasons. The three hurricanes that battered the state in the last two years is a biggie, causing catastrophic claims for insurers. Also, with near double-digit inflation, the cost of labor and materials has significantly increased to repair damaged properties. In addition, remember those door-to-door roof repairmen going neighborhood to neighborhood, trying to get residents to submit a claim for hail damages? This kind of fraud has triggered a multitude of litigation against insurance companies, driving up costs and forcing companies to pull out of the state altogether. It's no wonder they're building so many apartment buildings. Between the current mortgage interest rates coupled with Homeowner's Insurance costs, many people can't afford to own a home in Florida these days. 

          Well, I wanted to share some cost saving ideas that may help lighten your burden. 

 1.Get a Wind Mitigation Inspection. Things like hurricane shutters, window upgrades, reinforced roof to wall connectors or upgraded roof coverings may help drive down the cost of your HO insurance. 

2. Consider Raising Your Deductible. Normally you shouldn't submit a claim in the event of a small loss. By raising the deductible, you are assuming more risk on yourself, which should reduce the premium. However, don't raise it so high that you could be left financially overwhelmed in the event of a loss. 

3. Coinsurance. Remember, insurance is designed to rebuild your home in the event of a total loss. Carriers typically require 80% coinsurance, meaning you have to have the replacement cost at 80% or more of the home's replacement value. However, check what they are estimating your home value to be first because they may be overestimating the real cost of replacement.                 

4. Shop Around. Of course, competitive quotes are always an option to try to reduce costs. Just make sure, the quotes are apples to apples when comparing. These days, everyone can use a little financial relief and I hope this helps you save a few bucks next time your Homeowner's insurance policy renews.