ORLANDO, Fla. – The property insurance market was a dire field for homeowners in 2022, and 2023 may not look much better.
The Florida Legislature instituted some major changes to regulations affecting property insurance last year, but Lisa Miller, former Florida deputy insurance commissioner, said homeowners may not see big changes for 18 to 24 months.
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Still, there may be some things you can do to lower your property insurance now.
“You cannot take your insurance policy for granted,” said Miller, who now runs Lisa Miller and Associates, a government consulting firm. “Those days are gone. You need to know every single line item on that (declaration) page and understand what you’re paying for. What happens is we get our insurance policy, and we never look at it until we have to file a claim and then it’s too late.”
Miller said homeowners should use this as a good time to pull out their policy and look at these areas where they can make changes.
Home value
The house itself is covered under Coverage A in your insurance policy – dwelling.
Miller said it’s a good idea to review how much you’re paying to replace the house if something happens.
“If your house were to burn or blow away, what would it cost to replace it? Is the value of your home, your coverage A, correct? Should it be going up or down?” Miller said.
Miller’s suggestion is to talk to a contractor about what it would cost to replace the house. That is the cost of the building itself, minus the land.
Miller says what your home is worth will likely be different from what your county property appraiser will tell you. That’s because the property appraiser also includes the cost of the land itself, plus market dynamics.
Roof coverage
Roof coverage falls under Coverage A in your insurance policy.
Now one would ask, why would you even want to make a change to your roof coverage? Miller said it depends on how old the roof is.
Miller said people who have an older roof may want to change their coverage from “replacement cost” coverage to “actual cash value.”
Actual cash value coverage is cheaper than replacement cost coverage because actual cash value only covers what the roof is worth at the time the claim is filed, rather than the full cost to replace it.
“Now if your roof blows away, you’re buying a new roof,” Miller said. “But if your roof is 15 years old and you’re going to buy a new one anyway.”
Miller said to also reconsider the longevity of a roof based on what the roofing industry tells you.
“A 30-year roof shingle in Florida is a 15-year shingle,” Miller said.
Coverage for outbuildings
Do you have a tool shed? A pool house? A detached garage? A barn? Are you paying to cover them? Do you need to be?
Miller said to make sure you’re not overinsuring those structures, which fall under Coverage B in your policy – other structures.
Coverage for contents
Your personal belongings are under Coverage C of your insurance policy. But are you insuring more than you should be?
Miller said to take a look around your home and consider whether you should reduce your contents coverage.
“If I have a $285,000, $300,000 house, why do I need $100,000 in contents coverage if I don’t have them?” Miller said.
Getting help from your insurance agent
There are other areas of your insurance policy where you might be able to increase or decrease coverage.
Miller said it’s important to talk to your insurance agent when trying to make changes to your policy, but ask them pointed, diligent questions, so they understand exactly what you’re looking for.
If you can’t get a good deal with your current insurance company, you can try to shop around and your insurance agent should help you, but the market is tight right now, Miller said.
Also, be patient, because insurance agents are pretty busy these days.
Finally, flood insurance
For the 1 million+ Citizens insurance holders in Florida, flood insurance is now required, even if they are not in a flood area.
Miller said since Citizens is the government’s insurance, it’s good public policy. But she says Citizens policyholders are not the only ones who should get flood insurance, everyone should.
“I have flood insurance, I live in Tallahassee, I’m as inland as you’re gonna get,” Miller said.
Miller points to the recent hurricanes as a good example of what can happen in a severe weather situation where there’s lots of rain and nowhere for it to go.
“I think if you live in Florida, you should have flood insurance, doesn’t matter where you live. It’s not the surge it’s the inundation, and severe weather is only going to plague us in the future,” Miller said.
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