Floridians are placing themselves at risk in the event that they face a natural disaster.
As the cost of home insurance continues to increase tremendously in Florida, there is a growing number of property owners choosing not to continue to pay for coverage or who decide that they can no longer afford it.
Florida residents without a mortgage have the choice
Floridians who still have a mortgage are required to keep their home insurance as a part of their loan agreement. That said, those who own their homes outright can choose not to pay for coverage. Increasingly, there is a trend in which many property owners without a mortgage are indeed choosing to go without.
The I.I.I. cautions against dropping home insurance
The Insurance Information Institute’s (III) Mark Friedlander has cautioned many homeowners not to take the financial risk of going without coverage. He pointed out that for many people, even if they own their homes outright, having to pay the repair bill for major repairs could be financially devastating.
While many people have started their own savings, tucking money away into an account instead of spending it on home insurance premiums, Friedlander has cautioned against that as well. Though he acknowledged that some property owners could be lucky and have a 20-year savings fund to pay for repairs, there are certain challenges that could still make that strategy problematic.
For instance, not everyone has a couple of decades to save before disaster decides to strike. Or, for those who have had enough time to save to pay for repair bills, there is still the risk that another catastrophe could occur within a couple of years. This has been the case for many homeowners in Florida who have faced one hurricane after the next, for instance.
Lacking an emergency fund
A recent Bankrate survey has supported the claims made by the III, as over half – 56 percent – of American adults do not have adequate emergency funds to cover an unexpected expense of $1,000.
That being the case, it is very unlikely that more than half of Americans would be able to pay for the repairs associated with a catastrophic loss to their home without additional coverage.
