COMMENTARY | I've been on the hunt for a house here in Florida for some time now but, along with bank requirements that are almost out of the ordinary, I'm also finding that the cost of homeowners insurance might just be too much for me. According to my wife, who is an insurance agent, the continued price increases are likely due to the fact that many of the major insurance companies no longer write homeowners insurance in Florida. So, the ones that are left can raise rates as homeowners have little choice in the matter.
In Florida, when there is no insurance company that will write insurance on a home, the homeowner's only option is to then use Citizens Insurance. Citizens Insurance is government owned and, while it is a nonprofit company, it is also the most expensive insurance company to use. According to a story on PNJ.com, Citizens is actually getting ready to raise its rates by up to 82% in some coastal areas near Pensacola. While this is well above the 10% cap that is supposed to be in place for the company, it is nonetheless seeking permission to breach the cap.
Putting it All Together
For me, owning a home is very important, but I have to know I will be able to afford that home. Even though home prices in my area are still down considerably, the cost of insurance is now a big factor that I contemplate when looking at a particular home.
For example, I just looked at a home that would have cost about $650 per month in mortgage payments if financed for 30 years. My wife took the home's information and set out to see which companies would insure the home. She did find two companies, but the cheapest price would have been about $2,500 annually. That would have added over $200 a month more to our mortgage payment and that didn't even include taxes. Since we rent for only $750 per month we decided to keep looking.
The almost guaranteed fact that homeowners insurance prices will continue to rise for the foreseeable future has soured me a bit in my desire to own a home. While the older homes I can afford are far too expensive as far as insurance is concerned, the newer homes are too pricey regardless of the insurance costs. Though I will continue to look for the perfect solution I will do so with a watchful eye on what homeowners insurance will cost me both today and moving forward.
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More from this contributor:
- Real Estate
- homeowners insurance