Questions, questions & questions…….here are some answers and some important FAQ’s about homeowner’s insurance in Florida. We get questions every day about the insurance component of buying and owning a single family house or a condo in the Naples and Bonita Springs area.
There are many factors that are considered and evaluated when an insurance agent is consulted to provide a quote for insurance premiums. When a property is identified, there is a process of information gathering. Much of this has to do with the home itself and can be collected from the MLS system details of the listing. There is information that needs to come from you, the buyer, such as any past insurance claims or the breed of dog that you might have. Some of the other questions that you or your real estate agent would need to answer are:
- Is the community gated or guarded?
- Is there an alarm system? Is it monitored only for burglary or is it connected for fire, too?
- What is the construction for the second level, if that applies?
- How is the pool protected?
- What is the nearest location to a fire hydrant?
- How will title be taken for the property?
- Is the property in a wind zone?
- In which flood zone is the property located?
Inspections will be required and the results of these inspections will determine which of many credits might be available for the particular property. To begin, the insurance company is going to want to see the buyers name on the inspection documents so, do not rely on some past inspection reports or outdated information. Typically, a wind mitigation report that shows excellent features will provide the opportunity for credits towards the insurance premium for which other homes would not qualify. Also, newer construction is going to benefit from stricter building codes. In an older home, you will want to request a “Four Point Inspection” which will evaluate the life expectancy of the roof, electrical wiring, plumbing and the HVAC system.
How do you intend to take title to the property? Will it be in your name or names? A trust? An LLC? Many people in Florida take title to their real estate in the name of a trust and if the trustees are living in the home, then it does not usually increase the insurance coverage premium. Although a home is still insurable if the title is taken in the name of a LLC, it raises a red flag to insurance carriers because of the increased risk exposure to them. Consequently, expect the premiums to be higher.
Who, when, why and will the home be occupied? Insurance premiums will vary depending on if the property is occupied full time by the owners, occupied seasonally or rented out. One of the credits that can be applied to the premium if a home is not occupied full time is to hire a home watch service.
As you can see, there are many variables that figure into quoting homeowners insurance, flood insurance and wind coverage. We have only skimmed the surface here so, stand by for future articles about obtaining homeowner’s insurance for your home in Florida. Feel free to call or email us with recommendations for local insurance agents with whom you can consult. Send a message to TimCranch@StepsToTheBeach.com or call directly at (239) 272-4848.
Every property is different and everyone has a different situation but, at the risk of offering you some “ballpark” numbers, here are some real life scenarios which may or may not apply to your own situation:
- A single family home in Pelican Bay that will be occupied full time by the owners that is located in the most desireable flood zone of “X” was recently quoted an annual premium of $4,086 all inclusive.
- In Olde Naples, a home built in 2012 with an elevator and valued at $1,500,000 and will be occupied seasonally by the owner was quoted $8,516 for the annual insurance premium.
- In Naples Park, an investor purchased a single family home with the intention of renting it out on an annual basis. The house was built in 1978. In this case, the homeowners policy costs $1,075 annually using $150,000 as the replacement cost and a 2% hurricane deductible. Flood insurance was an additional $1,361 per year.
Seriously thinking of buying a home in Naples FL? Call Ellie 239-776-5077 or Tim 239-272-4848 today to schedule an appointment in person or over the phone. Will discuss your needs and desires and will get to work. With our connections in the area, we frequently know of new listings before they hit the MLS service and become public.
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