Homeowner’s insurance can play a significant role in where an individual purchases a home. For those who are looking for luxury homes in south Florida, the high cost of insurance can often be a deterrent. Fortunately, there are good reasons why the rates are so high. While most people think hurricanes are the primary reason, this isn’t necessarily true. Understanding these reasons will help you make the right choice for your family.
Expensive Hurricanes
Hurricanes are certainly part of the reason Miami luxury homes often come with high homeowner’s insurance costs. Although no major hurricanes have hit the state in several years, there is always a risk every year. One of the ways insurance companies determine future insurance costs is by looking at past events. Because Florida was hit by half of the 10 costliest hurricanes over the years, this still puts luxury homes in cities, such as Palm Beach and Fort Lauderdale, at an increased risk for making a claim in the future. Unfortunately, the lack of hurricanes has not caused insurance prices to drop.
Increasing Repair Costs
Another reason for the increase in homeowner’s insurance prices is still on the rise, despite the absence of major hurricanes, is the increasing cost of repairing homes. When homeowner’s make a claim on their insurance policy, there may be a deductible, but the insurance provider will cover the remaining cost of the repairs up to the policy limit. Because materials and labor have continuously increased in cost, the price of insurance must also rise to accommodate the higher costs. Because Miami luxury homes often use more expensive materials and are more valuable, this can also contribute to increases in rates.
Other Disasters
Hurricanes aren’t the only disaster that can increase the cost of homeowner’s insurance in Florida. Wild fires and sinkholes have become more common occurrences throughout the state. Any time there is an increase in the number of claims filed due to any type of disaster, the overall cost of insurance will go up as well. Before you buy luxury homes in south Florida, it is important to evaluate the level of risk for all disasters, not just hurricanes.
Florida residents have been fortunate not to experience the negative effects of a major hurricane over the past few years. Unfortunately, this hasn’t led to a reduction in the cost of homeowner’s insurance. This is because there are many other factors that can impact the rates insurance companies charge. Miami luxury homes will naturally have higher insurance costs than smaller homes located away from the waterfront, but these aren’t the only factors used to determine the cost of your insurance.
If you are looking for luxury homes in south Florida, contact us. We can help you find the right home at the right price.