Aug 26, 2024
M. Friedman has paid for property insurance on his Coral Gables home for 17 years — but he’s now debating whether it’s still worth it in the face of rising insurance costs across Florida.
"We're getting to a point now where it's really math," Friedman told CBS News Miami in July.
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Even with home upgrades he's made to lower his insurance costs, he’s still shelling out over $10,000 a year.
"I know a lot of people have seen their premiums go up more," he said.
Up to 1 in 5 Floridians forgoing insurance
Mark Friedlander, director of communications at the Insurance Information Institute, cited to CBS News Miami an internal study that found 15% to 20% of Floridians are forgoing home insurance. That's compared to 12% across the nation.
That may not be so surprising, considering how high insurance rates have been amid a slew of major weather events and several providers fleeing the state. According to Bankrate, as of August, the average annual premium for insurance in Florida is $5,531 for a $300,000 home — nearly two-and-a-half times the national average of $2,270. Some cities in the state have excessively high insurance costs, such as Fort Lauderdale, which has an average annual premium of $8,437 for such a dwelling.
Homeowners are resorting to different options in order to combat housing costs — with some moving to other states while others are opting to abandon homeownership.
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Does it make sense to self-insure?
Despite the number of Floridians without insurance policies, Friedlander doesn't recommend this option for homeowners.
"Realistically, those homeowners can't afford to pay for a catastrophic loss to their property out of pocket," he told CBS News Miami.
He recommends staying insured, even with Florida's extraordinary prices.
Friedlander believes the cost issue is tied to homeowners with properties on the coast or at high risk of experiencing severe weather who sign on with surplus line insurers. These companies are licensed outside of the state and are known to sell high-risk policies that are often more pricey.
"They don't have to follow the same regulations as the standard insurers, meaning they don't have to get their rates approved," he said.
Correction, Aug. 26, 2024: The teaser has been corrected to reflect that the study cited by Mark Friedlander shows 15% to 20% of Floridians are forgoing home insurance, not that the same share dropped their insurance.
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Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.
