In The Midst Of A Property Insurance Crisis, More Florida Homeowners Are Self-Insuring

In the midst of Florida’s property insurance crisis, a growing number of Floridians are taking matters into their own hands to safeguard their properties. Some are opting to forgo traditional property insurance and are instead choosing to self-insure. According to the Insurance Information Institute, the prevalence of Floridians self-insuring their homes has risen in the past year, primarily due to the exorbitant cost of insurance in the state.

Bronson Collins, a 90-year-old homeowner from Apopka, has witnessed a steady increase in his home insurance costs over recent years. However, the latest rate hike left him stunned. “From 2022 to 2023, my insurance premiums doubled,” Collins reported, noting the jump from nearly $2,500 annually to over $5,000. He expressed concern, stating, “It’s just taking more money out of my retirement accounts.”

In response to these escalating costs, more Floridians are choosing to forego property insurance altogether. Industry experts estimate that 15% of Florida homeowners are now pursuing self-insurance, which is double the national average of 7% and a 2% increase from the previous year. Mark Friedlander, a representative from the Insurance Information Institute, pointed out, “We are clearly seeing an uptick in self-insurance,” attributing this trend to the substantial rise in insurance costs within Florida.

Self-insuring entails not having an insurance policy to protect one’s property. Instead, individuals are advised to save the amount they would typically spend on premiums in an investment account, which can then be used to cover any potential repairs out of pocket. Tasha Carter, Florida’s Insurance Consumer Advocate, acknowledges receiving frequent inquiries from Floridians regarding self-insurance. While she understands the motivation, she emphasizes the significant risks involved. “I don’t recommend people self-insure. Most consumers just don’t have the available funds to be able to cover a catastrophic loss,” she cautioned.

While there is no legal requirement mandating property insurance, mortgage companies do necessitate it to safeguard their investments. Only individuals who have fully paid off their mortgages or purchased their homes outright have the option to consider self-insurance. Carter advises homeowners to explore various strategies to reduce insurance costs. For example, Collins consulted his agent and managed to make adjustments, resulting in a $700 reduction in his premium. However, it still more than doubled compared to the previous year.

Carter also suggests inquiring about all available premium discounts. Some insurers offer reduced rates for installing security systems, bundling home and auto policies, or implementing mitigation features like hurricane-resistant windows. Additionally, increasing the deductible can often lead to a lower premium.

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