It's the final countdown! 🎶

This article has some of the best (and final) value in this series covering the insurance challenges throughout Florida.

Missed the previous articles? Check them out here:

• Part 1: What's happening to insurance in Florida?
• Part 2: Why are insurance costs rising throughout Florida?
• Part 3: How are we addressing the issue?

Now, we're left with one major topic to cover:

What can you do to lower your insurance costs? 🤔

I've partnered with a good friend and insurance expert, Tommy Bailey, to go over the actions to take.

If you need more help in this area, send him a note.

Disclaimer: talk to your insurance professional before taking any action. The following information is to help guide you on what questions to ask them. 

How to tune-up your insurance policy

Above, I've got 3 areas in your insurance policy that could be costing you extra money. 💰

1️⃣ First, make sure your dwelling coverage is set at 100% replacement coverage.

This means you're insuring the home for the actual cost to rebuild if it were to burn to the ground. 🔥

Some policies are set at the purchase price which could be much higher than replacement cost (especially if the land is worth a lot). 💡

2️⃣ Second, when getting your policy, you might have primarily focused on the out-of-pocket cost to use your insurance policy: your deductible.

This is the amount you pay if you need to make a claim. 💵

After personally going through the claim process a few times, I can tell you that your homeowner's insurance policy should primarily be used for major losses.

It generally makes little sense to file a claim for the small stuff given how much your premium will go up afterwards. 😲

You might have picked $500-$1000 deductible when getting the policy to avoid large cash costs if something came up.

The right amount is more like $2,500 (as high as you can afford ideally).

This will save you each month through a lower annual premium and you can build up your emergency fund if you don't have one. 👍

3️⃣ Lastly, watch out for bloated personal property/contents coverage. 

This is the part that covers what's in the house. 🎸🛋️💍

It was common for me to see policies with $250k in coverage when I was a mortgage banker. 😳

I would jokingly ask the client if they had a Maserati parked in their living room and needed that much coverage. 🏎️

Make sure this number Is a realistic number based on what you own and would cover your most valuable items in a loss.

Chances are good you'll be advised to get separate policies for anything of major value (jewelry, collectibles, art, etc.) which will also cut down on the amount.

Insurance repairs to save you money

Let's switch gears and look at things you can do to your home to help reduce your costs. 🤑

Truthfully, there's not much. 😭

1️⃣ To start, replacing an old roof will definitely help.

As we've already learned, suing an insurance company (unnecessarily) to get a new roof won't. 😉

An easier action would be to ensure you have an active wind-mitigation inspection report on file with your insurance company. 📑

This report tells the insurance company the specifics relating to the structure of the roof and generally knocks off a chunk of the annual premium.

It can be done even if you've had your policy for a while and applies to roofs put on after 2002. 😁

2️⃣ Next, it might make sense to update your HVAC and/or water heater.

These updates won't necessarily lower your existing policy amount, but they may open up coverage through other carriers that offer more affordable policies.

✅ Pro tip: consider a home warranty if you're AC/water heater is up there in age.

I put a warranty on a rental property with an older AC that was still running but at risk of going to AC heaven.

To make sure I'd be covered, I went through a certification process to have it inspected so it would be covered from day 1.

It died 8 months later (of natural causes) and I was able to get a replacement with minimal out of pocket cost through the home warranty. 🙏

An $8,000 replacement ended up costing me $750 for the warranty and $200 for the claim. 🥳

3️⃣ Finally, if you've got the budget and were thinking of upgrading your windows, hurricane impact windows could be a good way to help you save on your insurance. 🪟

Finding Opportunity

🎀 Let's put a bow on it: 

The rising insurance costs are the primary challenge facing real estate in Florida. 📈

It's affecting both existing and potential home owners by increasing the cost of ownership. 🥵

A big driver of the higher costs has been excessive litigation against the insurance carriers. 👩‍⚖️

The good news is, there's a light ahead as the lawsuits are slowing down and stability is returning to the industry. 😅

And these practical actions can help you to reduce your policy costs. 🙌

Be sure to share these with your people as you never know how much this could save them. 📲

And as I said at the beginning, reach out to Tommy to get expert advice and to discuss your options. 

❓ Did I miss anything? Reply and let me know if you've got alternative strategies or ideas that could help.

Here's to warmer weather, more daylight, and a hot real estate market! 🚀

Dr. Alex Stewart
Founder

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