Many Floridians have found that their homeowners' premiums have risen dramatically over the past couple of years. In fact, Floridians currently pay the highest premiums in the nation, at an average of $6,000.
But it reportedly isn't just average Floridians who are feeling the financial pinch of homeowners insurance. The New York Post is reporting in September of 2023 that Florida's most wealthy neighborhoods are also paying much more.
Over $600K For Homeowners Insurance On Star Island: According to Profile Miami reporting in March of 2023, Miami's Star Island is the most expensive neighborhood in the United States, with the median home price at around $40.2 million.
In September of 2023, The New York Post referenced Bloomberg in reporting that a home on Star Island which was insured for $60 million is now paying $750,000 in premiums for less coverage than he had last year.
Another homeowner with a multi-million dollar home was profiled as receiving a premium of $622,000.
Another reported that his premium went up 62% from last year, so he chose to pay off his mortgage to give himself more options for cheaper insurance.
An Expert Says The Costs Are Justified: Redfin’s chief economist Daryl Fairweather told The New York Post that the high premiums are “justified by the expensive materials in the home or the contents of the home.” He also cited "rising costs of construction materials and labor..."
A Recent Survey Found That More Floridians Are "Self Insuring:" As you might imagine, some Floridians cannot afford the rising homeowners premiums. So some who do not have a mortgage that requires insurance have opted to "self insure," or to save the amount of money that they would pay out to insurance companies and use that money for any necessary repairs.
A survey in the fall of 2023 by the Insurance Information Institute indicated that 20% of Floridian respondents said that they are self-insuring, which is up from 8% in 2016.
Tasha Carter, Florida's consumer advocate, told WESH that self-insuring is risky. She explained, in part:
“Most homeowners just don't have the available funds to be able to cover a catastrophic loss. For example, if your home completely burns down due to a fire, how many homeowners actually have the necessary funds available to be able to rebuild that home in its entirety?”
In lieu of self-insuring, Carter suggested bundling policies, raising your deductible, and asking about applicable discounts.