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What a New Home Buyer Should Know about Homeowner’s Insurance


Most people love buying a new home, but dread the process of purchasing homeowner’s insurance in Florida. First of all, it is complicated and hard to understand—filled with insurance language that is intimidating to even the most seasoned home buyer. Secondly, homeowner’s insurance in Florida is expensive, following a string of damaging hurricanes beginning with Hurricane Andrew. This is not a sexy purchase, especially after you have put down so much money for the cost of your home, closing costs, etc . Thirdly, most people think they will never use homeowners’ insurance in FLorida. (We had a major fire in our house on Christmas Eve 2013, so I know that catastrophes happen.)

As you search for homeowner’s insurance on your most valuable asset, your home, keep in mind the following:

Where do you go to find a good homeowner’s insurance policy in Florida?
Believe it or not, there are many homeowner’s insurance companies in Florida. Which company you eventually choose depends upon many factors—the homeowner’s insurance company’s appetite for your particular risk, the cost of the homeowner’s insurance, and the terms of payment. That is reason to go with an independent agent who represents many different companies. Contrast this with a captive agent, who represents a single insurance company. Through the years, you will want your independent agent to shop your policy. If the agent has access to a wide variety of Florida homeowner’s companies, this is not a difficult task.

How much will homeowner’s insurance in Florida cost?
While, of course, there are many factors that go into the cost of your homeowner’s insurance in Florida, you can expect to pay at least $1,000. Remember, though, that there are several quality homeowner’s insurance companies in the State of Florida vying for your business. You may reduce the cost of your homeowner’s policy by securing a wind mitigation form as well as a four-point inspection. We at Gracey-Backer, Inc. recommend high deductibles, as the chances are you will not report small claims.

If you have filed a homeowner’s insurance claim within the past five years, you can expect to pay more for your coverage. If you buy a home close to the coast of Florida, you can certainly expect to pay more for homeowner’s insurance. And don’t forget about liability coverage and flood insurance, both important considerations in your overall insurance program.

Homeowner’s insurance premiums are generally due when the policy goes into effect. The insurance policy can then be financed over the year or paid out of your escrow account.

Don’t wait until the last minute
We at Gracey-Backer, Inc. recommend shopping for homeowner’s insurance well prior to your closing. Having said this, we have been able to offer our clients some quick turnarounds in a pinch. But generally, you are better off giving the insurance companies plenty of time to offer you a homeowner’s insurance quote. And, you definitely don’t want to be caught in a storm “box” when a major storm is approaching and the homeowner’s companies have shut down for new business. As in life, timing is everything when shopping for a Florida homeowner’s insurance policy.

Itemize your contents
As someone who has gone through a major home fire, I know from experience the importance of taking videos, saving receipts, and generally itemizing major purchases. If you have valuables, it is important to determine their value prior to a loss, rather than trying to determine value after a loss, when you are upset and your brain is foggy. Valuable items include jewelry, silver, furs, guns, coins, art and other collections or keepsakes. Insurance companies offer special floaters for valuable articles. Depending on the item, these floaters are relatively inexpensive and offer broader coverage than found on the basic homeowner’s insurance policy.

The bottom line on homeowner’s insurance in Florida: Deal with an agent who fully understands the market for homeowner’s insurance, represents a stable of fine companies, is straightforward with you about your options, and can handle the complexities of this often-complicated insurance.

John Gracey Backer, CPA


John Gracey Backer, CPA, is the Treasurer of Gracey-Backer, Inc., an Insurance Agency in Delray Beach, Florida specializing in All Lines of Malpractice, Professional and Personal Insurance for the Healthcare Provider. He can be contacted at 800-272-6055 ext 128, or at john@gbifl.com.

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