I got renewal quotes on 2 of my investment properties in Tampa this week. Last year I paid $1475 in premiums for the 2 houses combined, but the quotes this year came in at about $2200. That's about a 40% YoY increase! In a non-hurricane year!
Do any other Florida investors have recent insurance hike horror stories? Any recommendations on other providers or is just universal across the board?
Insurance and Inventory. The two biggest things I am dealing with here in NWFL. On the insurance front, my personal home insurance went up $600. Basically, carriers are not wanting to insure shingle roofs at or over 15 years....they really want to see at least 3 years left (12 year roof or less). If the home was built before 2000...that is another strike. All..and I mean all....carriers are doing their own inspections after closing. Even if the home is not needing a 4pt. They are going and doing the inspection. Some example premiums (all owner occupied):
1950's home with all major components replaced in the last 5 years (HVAC, HWH, Roof, Plumbing, Electrical)....inland. $2500 a year. Only 1 carrier available as of the date of the quote.
1991 with all major components less than 7 years old $2200 a year.
2021 build around 1400 sqft...$670 a year.
The # of carriers that will insure mobiles up here is also dwindling. Quotes running around $2000 for a 2005 Doublewide. $150K coverage.
Advice to any homeowner or investor in FL: Don't even mess with a shingle roof. Pay more...get metal...be done. Those are the only systems that your insurance thinks can last more than 15 years. Also, don't get sucked into solar or storm shutters (speaking for NWFL)..those two items may not have the insurance benefits you think.
@Jason L. I am so sorry this is happening to you. It seems universal. I get quotes at least 3-4 times a week and all have been much higher than last year. I hope someone is able to comment with different advice.
@Jason L. Yes, florida rates are nuts again this year, all my properties have seen 20-50% increases
I was recently told about a new roof replacement schedule endorsement being added to policies in Florida. Here's a link to one insurers explanation to it's agents.
Slide 1 (cgains.com)
Yes. This is a big issue and legislators are looking at the causes. AOB (Assignment of Benefits) is a huge issue. I wrote a blog about it a few months ago. Shady contractors are getting the AOB and then suing the insurance companies for payouts (usually roofs but you are currently seeing the Morgan and Morgan commercials about the plumbing now) for things that probably shouldn't have been covered.
That drives costs up.
I just read an article that around 40% of your payment is to cover litigation costs. And when the cost to defend or pay out litigation goes up, so do the rates.
Take a look at why Doctors cost so much -- medical malpractice insurance is crazy -- Surgeons pay between $30,000 and $50,000 a year.
Winter Park Florida SFH Having trouble getting any quote for insurance due to the normal underwriting concerns, roof, age etc, but what seems to be the roadblock right now is the partial repipe with Polybutylene. I'm a week away from closing on an all-cash offer (so is not the lender).
Recommendations? Is there such a thing as a rehab/construction period policy to get the piping changed over? Does anyone know of a company with will take on this risk albeit at a high premium until rectified?
Suggestions solicited and welcomed. Don
Hello Jason L. I just bought a 3/3, 1600 sq. foot Townhome with garage that was built in 2006 for $175,000 Cash. My Insurance Agent, whom I have been with for 30 years in Tampa, gave me a quote based on a property value of $248,000??? What is going on? She said that is what they would consider Replacement Value and it cannot be changed. This is a small, 17 Unit Townhome Community and some of them have roof problems. The shingle roofs are going to be replaced and I am going to wait until after that to look for another Insurance quote. I am with AAA Auto Insurance and will look into Bundling with them for another quote.
@Donald J Glidewell This may be a long shot but State Farm. I had a buyer client that purchased a 60's home recently. He already had a relationship with someone from State Farm.....but he was able to get 30 days to make the changes required without having the insurance premium increase. Basically like a grace period. I know that they have changed just like some of the other carriers but lately the coverage that they are willing to extend for the price is superior.
@Michael Haynes It sounds like this has more to do with the cost of replacement having increased exponentially. It also sounds like this community has an HOA...is that the case?
Hey Jason, I have a guy who could possibly help you out with better pricing. I am a property manager here in Tampa and he has helped a few of our owners get better rates
Hello Mellisa Jolly, yes there is an HOA, but, this small community does not have a golf course and recreation room and club house and barbeque, just a small pool good for laps and the kids. So, HOA is $240/month includes Water etc. I looked for six months while I was selling my Commercial property in S. Tampa and this was the only Townhome I found with pavers in the driveway and patio. A nice touch that makes for less property taxes. The roofs do not need replacement if they would maintain what they have after 14 years, but, the Association does not want to do that. They have the funds and will replace all 17 units. So, maybe I can get a better Insurance quote for new roofs and if I sell after ten years there should be no Inspection problems. The "ten years of life left on a roof" for Mortgage approval is for real.