The cost of homeowner's insurance is rapidly rising across Florida and the nation due in large part to extreme weather showing up throughout the country. Pricing models that insurance companies built just three to five years ago are not holding up as weather patters are getting more extreme with each passing year. This has a major negative impact in Florida where extreme climate conditions are causing strains to availability and affordability. Homeowners purchasing older homes that aren't up to current codes are finding that insurance is unaffordable, if available at all.
People are buying homes in unfamiliar areas in current market are finding many of the older properties are uninsurable. Coverage from these homes is purchased on the surplus market where rates aren't controlled by state regulators. So insurance companies can charge what they want. Most people don't consider or even understand the costs and challenges with buying homeowner's insurance when entering into home purchase agreements. It is getting to the point in the high end market where performing $100,000 of rehab to the home, including replacing all doors and windows and strapping down the roof, is cheaper then paying $20,000 - $40,000 per year for homeowner's insurance.
A good tip for homeowner's is to take care of their homes and continue to update them as the years move forward. But, in the big picture this raises more questions about the sustainability of the current insurance model across the country and also raises concerns about the sustainability of homeownership for most consumers in the current market place. Between over priced homes, corporate buyers driving up prices, and unaffordable insurance most consumers may be pushed into renting instead of buying for the next generation.