Slashing Homeowners Insurance Costs: Part II
The Aftereffects Of A Recent Hurricane
When Hurricane Michael hit the Panhandle of Florida in October of 2018, I feared that the integrity of my home would be seriously tested by the anticipated wind gusts for my area. Yes, we did have strong winds and horrific rainfall, but there was no resultant damage to my power lines or metal roof. But there could have been.
One of my neighbors had a tree fall on the electrical service lines to their house. They had to wait much longer than the rest of us to have their power restored which was out in our neighborhood for 48 hours. The fact that we live in a heavily forested area had a lot to do with our dodging the horrific destructive forces hitting the coastal towns of Panama City and Mexico Beach.
So I then focused on another concern ascribed to in my previous article, “Slashing Homeowners Insurance Costs: Part I”: The effect that storm would have on my monthly mortgage payment the next time the loan company calculated funds needed to cover impounds for the coming year. The constantly rising cost of homeowners insurance in the State of Florida has haunted me since I first bought my rural home in the country 4 years ago.
I have constantly struggled to keep the annual premium in check. To do so, I have changed insurance companies each year except for one. Every time a major hurricane hits, insurance companies reevaluate their exposure and the consumer feels the brunt of their wrath.
Hurricanes Irma, Michael, Et Al.
The Year that I bought the house in 2016, I was burdened by a suffocating insurance premium of $2,400. for one year of coverage from Florida National Insurance Company. That was the best rate my local insurance agent could get me. At the time, I had little knowledge of my options and succumbed to a burden of $200. added each month to my mortgage payment.
The following year (2017), my agent was able to get a drastically reduced cost through another provider in the area called Florida Specialty Insurance Co. (FSIC). Their premium of $1,600 a year was much welcomed by me and dropped my monthly outlay to $133, a savings of $67. This figure also became my benchmark for years to follow.
The renewal premium jumped to $1,660 in 2018 due, in part, to the response from damage incurred by Hurricane Irma. But, what I didn’t know at the time was that this company hadn’t yet fully incorporated payout losses into their calculations for an updated premium structure for my area by the time my yearly stipend was due.
The next year, in 2019, I received a gigantic increase in my premium from FSIC that exceeded the $2,400 I paid out to Florida National. By then, the after effects of Irma had come home to roost, and I was now back to square one.
So, I went online and responded to an add generated by KIN Insurance, an agency located in Chicago, Illinois. They found me an insurance company called Peoples Trust located in Del Rey Beach, Florida who presented a quote for $1,597. Since I now was able to stay close to my benchmark cost with this quote, I took the plunge and switched to the new provider.
However, once again, that premium was calculated and paid for ahead of that company’s calculations for the disastrous carnage caused by Hurricane Michael which slammed into the Florida Coast as a category 5 monster in October of 2018. So, I had to wait a year to see how that storm would affect my premium in the upcoming year.
When I got the paperwork in the mail in early August of 2020, I received my answer. The new premium had jumped to $2098, a jump of $501. This meant my monthly mortgage payment would increase by over $40. per month. It was then that I realized my ability to keep the total outlay required my loan company each month within acceptable limits was being threatened by dramatically rising insurance rates.
Continuing The Battle To Keep Costs In-line
Now I felt defeated and did nothing for 2 weeks while trying to accept the inevitable consequences of living in a state that was the epicenter of hurricane activity. What depressed me the most was that the money available to pay that premium from my escrow account was only $1,595. This amount was sufficient to cover the previous year’s premium, but the lender would have to advance me enough money to handle the 2020 charge.
What finally got me wound up and set my wheels in motion was the notice from the loan company that they had gone ahead and paid the new premium 2 weeks ahead of the due date in August. So I went online and searched the internet once again hoping for success.
I did find a new online “digital” insurance agent called Nsure.com that maintained a physical address in Boca Raton, Florida. After I answered a multitude of questions regarding the attributes of my house, I got upfront online quotes from 12 different different providers ranging from $840. a year to $1,560. So my hope was renewed with the prices presented, but there was a caveat: A Wind Mitigation Report was required.
A Much Feared Inspection
The new potential agency wanted a copy of two documents: The latest declarations page from my current insurance provider and a Wind Mitigation Report. The latter was a determination of my home’s ability to withstand the forces generated by the impact of a a severe storm in my area. Unfortunately I had no such report, so I had to find an inspector in my area. And I needed one fast.
When the inspector who did my full blown home inspection before I bought the house told me he couldn’t help me, he gave me a referral to another individual who responded immediately. When he arrived, I did my best to boost my home’s credibility, but I knew there were shortcomings:
- No hurricane straps on the exterior walls
- No hurricane shutters to protect the windows
- Other considerations now required by building codes for new homes
I did have one positive feature, though, which was the fact that I had replaced all the old 1/4″ metal roof attachment screws with new 5/16″ galvanized ones with a larger sealing washer to eliminate any active or potential leaks. His pictures of the roof helped my cause and his report highlighted that feature.
The New Premium
When all the information needed by the agent was compiled, they presented their findings to the companies that furnished the preliminary quotes. The quote that I got back was amazing.
Tower Hill Insurance presented the agency with the lowest quote at $1,388., a swing of $710. a year. Instead of paying an extra $40 plus per year added to my mortgage payment, I would be saving $17., a swing of $57. per year.
The irony of this was that Tower Hill was the Insurance provider for my residence in Wellington, Florida up until the year 2008 when I sold the home while living in the New Orleans metro area doing work there after Hurricane Katrina. I almost wish that one of the current insurance agents I had been using contacted them in the first place. But since they are only linked to the company’s they prefer, this option was not on the table until now.
So that is where I stand until I am hit with a new bill for the year 2021. I just hope that I don’t have to go searching for a new company to keep my yearly premiums in check. I’m running out of opportunities and may have to bite the bullet going forward.