FL rental insurance

[Daria B.]

Need some guidance on insurance for one of my properties. I either drop it, pay the exorbitant premiums, or reduce it somehow and only have liability, if I can. 

I have always had what I call full coverage in case of something happening to the property I would not be out a total loss.

There is no mortgage or note so I own it out right. It’s 20 yr old (2005). I’ve have this property for several years always evaluating insurance each year.

For several years it was under American Integrity until my then broker quit (2023) and sold it to another broker and AI would not do an agent change. This meant I had to go with another company and the state insurance Citizens was what my new broker could get, also cheaper premium.

Then last year Citizens dropped a bunch of people and we were pushed to what ever insurer they could push it to - I had no say in the matter of course this is what they do.

With Citzens they only would max coverage for personal liability to $100k and my umbrella (separate policy) required $300k on rentals. So, I paid (over paid) for additional with another insurer for liability just to appease the umbrella req. 

The AI underwriter said the agreement with Citizen’s depopulation is that liability must stay at 100K and cannot be change on the initial depop transition. That’s just rubbish. 

I don’t understand how they are even dictating to AI what to do with their business.

I’m thinking I can drop some of these coverages but like I said I’ve always had full coverage.

What are other people doing for insurance coverage? Is their a large population paying for replacement in case of a tragic event or not and only doing liability?

Currently, I have this following DP3 policy that will be the renewal:

SECTION I – PROPERTY COVERAGES LIMIT OF LIABILITY PREMIUM

Coverage A – Dwelling $265,400

Coverage B – Other Structures $5,308 Included

Coverage C – Personal Property $5,000 Included

Coverage D – Fair Rental Value* $26,540 Included

Coverage E – Additional Living Expense*:

*Coverage D and E combined, limited to 10% of Coverage A for the same loss (see policy).

SECTION I – DEDUCTIBLES:

In case of a property loss, we only cover that part of the loss over the deductible(s) stated:

All Other Perils other than Hurricane Deductible:

HURRICANE DEDUCTIBLE: 2% of Coverage A Sinkhole Deductible: Not Included

$2,500

$5,308

SECTION II– LIABILITY COVERAGES

Coverage L – Personal Liability

Coverage M– Medical Payments to Others

$100,000 $0.00

$2,000 Included

☺️

[Andrew Bish]

Hello Daria,

I am not in Florida so I will have to move past the situation with Citizen, although, I understand it is quite the mess. However, I might be able to add some info for coverages. The coverages you have listed are fairly common across any carrier with a DP-3 coverage form, I don't see any optional endorsements included. The existing line item coverages don't leave too much room for savings. This is always a tough question, we want to balance premium paid now vs potential out of pocket cost later, whether the cost is incurred as a deductible or complete repair.

 Since you own the property outright, it sounds like you could go the path of self-insured, i.e. not carrying a policy with Citizen or in the private market at all. This would of course leave you paying out of pocket for any claim situation.  A premises liability only policy might be an option as well through an excess & surplus broker which would exclude the physical structure, but would afford coverage to you for liability issues that may arise from the subject property. 

But before completely forgoing dwelling coverage, you may be able to find cheaper coverage with the policy form DP-1 or DP-2. Lowering the coverage form does not typically change the coverage amounts, but rather changes the perils (or causes of damages) that are covered. In this case, moving away from a DP-3 would be moving away from named exclusions and taking on the increased risk of named damages. This does limit the scope of coverage, but also lowers the premium cost. 

I am an agent myself, so I have trouble recommending you skip on the dwelling coverage entirely, but it may be an option. I'd be interested to see how much a DP-1 or DP-2 would save over DP-3.