The coverage industry in the state is having a large impact on real estate.
Though buyers are returning to the real estate market as they start to lose their hesitation to buy a property and regain the means with which to do so, but the homeowners insurance prices in Florida are making those same consumers balk.
In some cases, it is leading buyers to decide against a purchase, in others, they are swamped after they’ve bought.
Depending on the neighborhood in Florida, the homeowners insurance premiums can be prohibitive for many home buyers who would otherwise have made a purchase without any hesitation. The price of the property itself may be acceptable, but sometimes the monthly cost of coverage is even higher than the mortgage payments.
Homeowners insurance is holding back first time and experienced home buyers alike.
One of the primary reasons for this high cost of Florida homeowners insurance is due to the recent changes that Citizens Property Insurance has made to its premiums. The quotes that are now being issued by the state-run insurer are now far higher than what most new home buyers have ready in their budgets. Often, it is causing deals to fall through, or the purchasers are finding out too late that they are now faced with expenses that are far greater than what they can actually afford.
Citizens has made statements to justify its most recent rate hikes, which have followed closely on the heels of other high increases in premiums, as well as in a massive investigation into hurricane proofing efforts that have caused thousands of residents to lose their discounts.
These justifications were primarily that the homeowners insurance company is supposed to be a last resort option and that it is now covering far too many homes. This is causing the private coverage market prices to skyrocket. Furthermore, if things were to continue the way they are now, then a massive “hurricane tax” would be required in the near future if a major storm were to eat through the insurer’s cash reserves. Such a tax – which all residents of Florida would be required to pay – would, according to state lenders and the insurer’s executives, cause crippling harm to the state’s economy.
