5 Tips to Lower Your Insurance Costs in a Rough Market


By Julie A. Martin

1. Update your home. In this property insurance market, most of the standard carriers are imposing strict age guidelines on Roof, Heating, Wiring, and Plumbing. If your home is 20 years old or older, keep in mind that the older your roof is, the harder it will be to move your insurance to a different carrier. The same holds true for your hot water heater, which most carriers regard as too old once it has been in your home for at least 15 years.

2. Confirm with your agent that your insurance has all applicable discounts. Wind Mitigation discounts weigh heavily on your premium. Roof credits such as FBC, or Florida Building Code Equivalent, Hip roof, for roofs that slope on all four sides like a pyramid, and single wraps, may vastly decrease your premium from what it is now. If you have recently replaced your roof, it is best to order a new mitigation inspection directly afterwards, and submit it to your agent. Carriers acknowledge new inspections as of the date they are received by the underwriting department, rather than the date they are performed.

3. Check your Total Insurable Replacement Cost. Ask your agent to update your replacement cost estimator. Most standard carriers have some form of inflation guard on their policies, which is designed to keep your dwelling coverage at or above the level required in order to fulfill the Florida Valued Policy Law. Due to the recent burst of inflation in materials and the costs of hiring a licensed contractor, some policies may experience a bigger jump in dwelling coverage from policy term to policy term. It is best to check with your agent to be sure your home is not over-insured.

4. Smart Water Protection System. Some newer homes have a Smart Water Protection system which automatically shuts off the water in the event of accidental leakage, and many carriers offer a good discount to policyholders for having this device installed in their homes.

5. Increase Deductibles. This is a valid way to reduce your overall property insurance premium. However, there is a downside. For one thing, if raising your deductible significantly increases your potential out of pocket expenses in the event of a claim, you have to decide if you are prepared for that risk. Secondly, some deductibles can only be changed at renewal. If you change your wind deductible from 2% to 5%, you will have to wait another year before changing it back, so be sure to calculate your potential out of pocket exposure before making this decision.

In this rough market, it is difficult to shop rates between carriers, but the best time to do that is after hurricane season ends, which is in December.

The guidelines are always the toughest in high summer, so that by December, many of the carriers have relaxed their rules enough for people to move from carrier to carrier with much less fuss and expense, and that, dear reader, is what we all want—peace of mind with less expense.