Insurance is all about RISK. If an insurance company feels there is too much risk of costly damages, it will either raise fees or stop selling in the high-risk area. Florida is seeing both happen.
Part of the reason this is happening in our area is many condo owners are not willing or able to invest in keeping their property protected. Some of the biggest damage risks are water, wind and fire. Old windows and doors often will not withstand high level hurricanes. Hot water heaters over 15 years old and poor plumbing often leak or rupture. Unsafe electrical panels often cause fires. All these contributors often cause severe damage to floors, walls, cabinetry, appliances, electrical systems not in just the owner’s unit, but in contiguous units.
Insurers willing to provide policies in our area, including Florida’s own Citizens, are telling us what risk reduction items are required to buy and/or reduce policy cost. Owners just need to ask what those items are and what would the policy cost difference be.
Example for helping decide to meet requirements or not (individual examples will vary):
How long will I likely own my unit: 15 years.
Insurance quote based on my unit’s current condition: $2,700 (example meets all requirements except windows & doors.)
Insurance quote if all insurance risk requirements met: $1,700
15 yrs X $2,700 (not counting annual increases) = $40,500
15 yrs X $1,700 (not counting annual increases) = $25,500
Potential savings over time ($40,500 - $25,500) = $15,000
Windows and doors quote to meet requirements today: $11,000
Will property value increase once windows & doors replaced? Yes.
Property owners certainly do not have all the control over risk. However, we can explore our options to do what we can to minimize it. We can likely save in the long-term while keeping our property safe and its value up now.