High Home Insurance Premiums Hit Florida

The real estate market in Florida is booming, thanks to an increasing number of foreigners buying vacation homes in the southern state with longest coastline. However, increasing home insurance premiums can be a damper. Home insurance premiums are rising in the U.S., increasing homeowners’ burden.

According to a new survey conducted by PremierHomeownersInsurance.com, an online insurance agency, the average home insurance policy in Florida comes with a $2,500 per year deductible, and a premium that amounts to more than $1,101 annually.

"Ballooning home insurance policy premiums that are hitting homeowners and potential home-buyers alike,” Morgan Moran of PremierHomeownersInsurance.com said in a statement. “The former are wondering if they will be able to hold on, with the insurance premium in some cases having grown larger than the mortgage. Some home-buyers are finding it impossible to close on properties they otherwise qualify to purchase."

The threat of unaffordable home insurance premiums, which many believe will continue to rise in 2013, has home-buying Floridians pulling back from that investment. More than 40 percent of Floridians surveyed by the company said "they are nervous about having to pay higher homeowners insurance premiums in 2013."

This might indeed be the case, as the 12-month home insurance premiums in December 2011 saw an increase of 19 percent from January 2011 value, Homeinsurance.com, another online insurance company, reported. Some of the areas that saw dramatic increase (29-39 percent) in premium rates are Mississippi, Montana and New Mexico.

Meanwhile, since the beginning of the year, experts had been predicting increase in premiums. NPR News reported that with 2011 natural disasters causing close to $35 billion in insured damages, insurance companies will be revising their risk coverage, resulting in increased property insurance coverage.