Home insurance costs in storm-hit Florida are at a crisis point, and seniors are increasingly worried about whether they will be able to keep their homes.
Real estate agents and mortgage lenders who spoke to the Post said insurance companies in the Sunshine State are forcing prospective buyers to look for cheaper homes.
Meanwhile, existing HOA fees for condo owners have doubled in the past year as the threat of hurricanes increases.
“Every time a storm occurs, insurance companies either stop selling insurance in Florida or significantly increase their prices in response,” said Cambridge Home Loans, a Tampa-based mortgage company. Dotcom Vice President Ryan Saylor told the Post.
The state’s seniors, who rely on Social Security checks and other fixed income sources, are now contemplating what their future holds.
“I wake up every day and think, ‘Okay, let’s start packing.'” Ellen Fincher, 72, of Vero Beach he told WPTV-TV.
Fincher, who has owned the $360,000, three-bedroom, 2,800-square-foot home for 10 years, told the station that his $13,000 annual insurance premiums had risen to the point where he could no longer afford them.
“You can’t do that when you’re on a fixed income,” Fincher said. “You live alone, who can help you?”
Homeowners insurance in Florida ranges from $1,700 to $2,700 per year, based on $300,000 of home coverage and $100,000 of liability coverage. According to US News.
Insurance is a must for anyone seeking a mortgage, and many buyers are having to reconsider how much they are willing to spend.
“People are not insuring single-family homes and are using cash,” said Michael Martilena, a luxury real estate advisor with Miami-based real estate agency Compass.
About 15% of homeowners in the state don’t have property insurance, compared to the national average of 7%, according to the Insurance Information Institute, an insurance industry-funded research organization.
The state had a relatively mild hurricane season last year, with only Hurricane Idalia roaring through the sparsely populated western region on September 1st.
Damages amounted to between $3 billion and $5 billion.
The Florida Legislature has made changes to insurance premiums, including making it harder for policyholders to sue their insurance companies and forcing insurers to offer discounts to homeowners who strengthen their properties with storm mitigation improvements. We are considering changes that we hope will lead to lower rates.
Saylor said he recently had to take $50,000 off a mortgage pre-approval for a veteran who was looking to purchase a $350,000 home through a VA loan.
“After factoring in insurance premium increases, we had to cap pre-approvals at $300,000, forcing buyers to look for less expensive homes,” Saylor told the Post. Told.
Saylor said people looking for luxury property on the Florida coast are seeing a “sharp increase in insurance premiums.”
Condominium buyers are also “feeling the pinch,” Martinena said.
He said a friend who owns a condo in a small building in Miami’s trendy downtown Brickell neighborhood recently had his monthly HOA bill double to $1,800 a month.
A Canadian looking to buy a condominium in a luxury building in Miami Beach was shocked when he was told he would have to pay HOA fees of $4 per square foot per month.
The building also includes units boasting oceanfront views and condominiums of at least 2,000 square feet, which equates to monthly HOA bills of at least $8,000.
Martilena told the Post that prospective buyers are “rethinking” their options, including renting or buying a condo hotel. Hotels rent out units when the property is not in use and split the proceeds with the owners.
A homeowner looking to refinance a $5 million property on the Boca Raton Intracoastal Waterway was unable to find another insurance company to renew his policy.
“They went without insurance for almost a year,” Saylor said, adding, “Mortgage underwriters have made flood insurance requirements very strict, which is part of the reason why premiums have gone up.” “It has become a department,” he added.
Seven insurance companies have declared bankruptcy in Florida since the beginning of 2022.
with post wire
