What to Do About Property Insurance?

As homeowners in Florida, we have two choices for property insurance – to be or not to be. If our home is paid off, we are not required to hold insurance on it. Many opt for this approach because of the skyrocketing cost of insurance. Most of us though are on the other side of ownership. We have a mortgage, and our mortgage company requires us to have insurance. Makes sense. 

Instead of inventing the wheel, look at what other states are doing and how they are handling the increase in property insurance costs. North Carolina and California are on opposite sides of this country, yet both have found ways to keep property insurance at bay. 

North Carolina offers a public insurance option which covers only hurricanes for all North Carolinian homeowners, and this is optional, not mandatory. Simply put, if you want hurricane insurance you get it through the State not private insurance companies. California offers the same type of insurance for earthquakes.  

Both approaches allow private insurance companies to cover all other insurances without having the burden of a company ending event. By allowing more private insurance companies to insure what they can insure keeps our insurance landscape healthy and affordable. Vibrant insurance companies keep our citizens covered.

One catastrophic hurricane or earthquake can force many private companies into bankruptcy. Allowing states to cover these incidences keeps private insurance companies solvent. A few years back when Florida was hit with four hurricanes in one season, many insurance companies went belly up and left the state because of the high cost of insuring Floridians.    

Keep in mind, insurance companies are there to cover all unfortunate events, not maintenance. A tree falling, a microburst storm, a car plowing through your front porch – these are the events for insurance. A new roof because our old one is over 15 years, shotty workmanship on our shed, cracked concrete is not insurance worthy unless we hold maintenance insurance.  

What exactly is Florida’s Citizens Insurance? It is a state-run insurance option. It is used for those homeowners who are kicked off private insurance because of high risk. High risk usually refers to homes in flood zones and coastal areas which are prone to direct hurricane strikes.  

Now, the State of Florida has a culminative reserve of 18 billion dollars with $5 billion set aside for a rainy-day fund. By allotting more state funding, Citizens can expand to include all Florida homeowners who desire hurricane coverage. The more Floridians are covered the less cost per person – law of economics.

This will be a supplemental insurance and covered by Florida and its citizens. Private insurance companies will cover all other insurance. This is Florida’s North Carolina and California’s approach to keeping property insurance affordable.
We can stay the course and property insurance will most definitely continue to increase aggressively like we have seen for the past few years, or we can look towards other states who have found ways to maintain a high quality of insurance without skyrocketing costs.

Farmer Banks Helfrich teaches gardening monthly at Florida Blue Clermont and on his seven-acre farm which includes15 different instructional gardens. Farm tours are every 2nd Sunday. Call Banks for more information. (407) 616-9720