How Do Florida's Coastal Windstorm Costs Compare?

By: Alex Tiegen | Posted: April 19, 2010 12:12 AM

Hurricanes are a constant threat when you live on a Southeastern U.S. coast. But so are high wind-insurance premiums. Wind premiums can prove just as damaging to an insured's bank account as a high-powered windstorm can be to a home and family  -- even for residents protected by state-sponsored insurers of last resort.

And in Florida, where June marks the start of crowded beaches and hurricane season, statistics in neighboring states show coastal wind-insurance for older homes is no bargain. 

A Sunshine State News evaluation of windstorm premiums for older homes in Florida, Louisiana, Mississippi, Georgia, South Carolina and Texas showed that it costs more than most -- and in some cases a lot more -- for a premium in Florida than in many of those neighboring coastal states.

Florida Citizens Insurance Corp. covers approximately 1 million homeowners. Its premium for a $200,000 masonry home built in Miami-Dade County in 1990 today is $4,481 a year.

Sample comparisons? A similar wind-insurance premium from state-run Texas Windstorm Insurance Association costs $1,987. In Louisiana, where the age and construction of a dwelling don’t change, the cost of wind insurance for a home with wind-mitigation credits is $3,512. Without the credits, it rises to $5,313. (See below for a complete list of states and costs.)

Citizens has kept its premium at the same rate since 2007 due to a rate freeze and a lack of major hurricanes.

But the company should be allowed to raise its premiums, said Dave Letson, a professor for the Rosenstiel School of Marine and Atmospheric Science at the University of Miami. Allowing Citizens to raise its rates will give it financial solvency, Letson said.

“I don’t like paying high premiums, but I do agree with that step,” he said. 

A recent report that Letson wrote for Florida TaxWatch, a nonprofit Florida government watchdog, revealed that a once-in-a-century storm would leave Citizens with a $10.6 billion deficit.

The state insurer-of-last-resort said last week that it would be able to pay as much as $14 billion in claims this year and would not have to impose emergency assessments on clients until a once-in-50-years storm.

Florida lawmakers in the House and Senate have been clamoring to allow private insurers to unfreeze their rates so they can compete with Citizens.

Letson said that private insurers' rates would eventually fall for inland Florida, but coastal residents should make peace with the fact that their wind premiums will probably always be high. It's unreasonable to expect Citizens to lower its rates.

"It would be a little irresponsible if they did," he said.

Sunshine State News contacted state-sponsored wind insurance pools and their contracting agencies to compare how Florida’s wind policy rates measured against its neighbors. All information is for older masonry homes built to code on the coast with $200,000 dwelling coverage .

Company                                                                        Rate            Deductible
Florida Citizens Property Insurance Corp.                    $4,481          2% Hurricane/ 2% Wind deductible
Texas Windstorm Insurance Association                      $1,987          1%
Georgia Underwriting Association                                $1,106           1%
Mississippi Windstorm Underwriting Assn.                   $2,646           $500 and 2% Named Storm
South Carolina Wind and Hail Underwriting Assn.        $1,327          3%
Louisiana Citizens Property Insurance Corp.               $3,512           N/A
w/ wind insurance mitigation

Contact Alex Tiegen at or (561) 329-5389.

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