In hurricane-vulnerable Florida, insuring homes and valuables against destructive storms is a rite of passage rather than a sidenote. While it may not come as a surprise that Florida residents paid the most on average for homeowner's insurance in the nation as of December 2013, it was not due to hurricanes alone. As the Tampa Tribune notes, the absence of a major hurricane in nearly a decade after Hurricane Wilma in 2005 did not stop yearly increases in premiums.
One Policy Isn't Enough
Floridians forked over nearly $2,000 a year for premiums in 2013, but even that didn't cover everything related to hurricanes. A standard policy covered wind damage, but that's not all those storms deliver. If the storm flooded the home, for example, the homeowners would have to have a separate policy to cover that event. In this sense, the full cost of "hurricane insurance" can't be covered in one blanket term since it involves several policies, each with its own deductibles and sub policies.
The Hurricane Deductible
Homeowners also must account for the so-called hurricane deductible. In Florida, along with 17 other hurricane-prone states, insurers can automatically tack on a hurricane deductible to a homeowner's policy. The deductible ranges from 1 to 5 percent of the value of a home. It applies to damage specific to hurricanes and is triggered by specific criteria, such as severe weather alerts. That percentage is what the homeowner pays in the event of hurricane damage.
Flood Insurance and Legislative Reforms
According to the Federal Emergency Management Agency, a fifth of the state's flood insurance policies increased by 25 percent in January 2014. However, some homeowners in Florida saw increases of 700 percent in just one year. Part of this increase was due to the Biggert-Waters Flood Insurance Reform Act of 2012, which approved rate hikes. The political website Florida Watchdog claimed the hardest-hit counties were Pinellas, Miami-Dade and Lee.
Tools to Compare Rates
Floridians who want to find insurance rates for their counties can use online tools such as the Florida Office of Insurance Regulation's CHOICES. It allows them to compare insurance companies and the average premiums for each. They can also plug in their information and find a list of prices and insurers. As of 2014, a homeowner with a $150,000 pre-2001 building with no wind mitigation in Miami-Dade county had 27 choices ranging from $4,000 up to $13,000.