It's Time To Watch Out For High Florida Home Insurance Rates Again

As you plan your finances for the coming year, you've probably already factored in a 10% to 15% rate increase on your Florida home insurance. But you might not know about some discounts you might lose this year that could result in a massive increase in your premiums.

Presently, Florida homeowners like you get the benefit of wind mitigation discounts for multiple home features that help make your home more resistant to hurricanes. Home insurance companies are required to give you this discount under Florida law and a specific formula must be used to calculate it. It includes discounts for things like the shape of your roof, whether your roof has a secondary backup system for removing water, the methods used to attach your roof to the walls of your home, and whether or not your home has hurricane shutters among others.

Home insurance consumers in Florida have enjoyed these discounts which can be up to 50% of the wind premium on a home. However, homeowners sometimes are disappointed with those discounts as well. One homeowner who was showcased in the St. Petersburg Times spent $5,225 for hurricane shutters and to reinforce the garage door on his Spring Hill, Florida home. He was very upset to find out that his $5,225 investment would only give him a discount of $16.11! Other Florida homeowners have saved considerably more.

Started in 2002 along with improvements to the Florida building code, these wind mitigation discounts were an important step in the process to deliver lower Florida home insurance rates to those with homes less likely to sustain serious damage in a Florida hurricane. The State of Florida doubled those discounts in 2006 to give some rate relief after the big hurricane seasons of 2004 and 2005.

At the moment with the approach of the 2010 Florida legislative session, home insurance companies are asking legislatures to reduce some of those discounts. In some areas the companies might have a point. To begin with, these does appear to be some fraud connected with those discounts. This fraud can be the result of homeowners misrepresentations and also due to errors in the findings from the home inspection. Regardless, it could result in homes receiving discounts that aren't appropriate. Florida home insurance companies also point out that doubling these discounts in 2006 was more about currying favor with voters rather than coming up with a scientific way to calculate mitigation discounts based on how your home would actually perform during a hurricane.

Some home insurance companies are ordering new inspections to get a better picture on what's really been done to harden your home. If a re-inspection is ordered on your home and discrepancies are found, some of your discounts could be denied and you could be required to pay a significant increase in your Florida home insurance premiums.

From your perspective as a homeowner, rolling back these discounts would add significantly to the cost of your Florida homeowners insurance. And this would happen during one of the worst recessions during our lifetimes. For some homeowners in Florida, losing or reducing those mitigation discounts would result in a massive increase in premium costs.

This is a critical development that all Florida homeowners should be following. Even slight changes to the mitigation discounts could cause massive increases in Florida home insurance premiums that will make the rate increases already approved look like small change!