This article is meant to be a simple explanation for why home insurance rates are on the rise and some helpful hints on how to lower home insurance cost without sacrificing coverage.

I am not saying I agree with the logic (of the insurance companies) for all the below reasons on why home insurance rates have and are going up, but some make sense.

To start I think it is important to understand the basics of how insurance works. Simply put, everyone pays premiums into a bucket to hedge against the risk of a loss. So that when a percentage of those people have a loss, they can pull out a much larger amount from the bucket than they put in to either fix or replace what they lost. This is very simplified explanation, and now that we have covered that, below are a few big reasons home insurance rates have gone and are going up.

1. Assignment of benefits.

There has been a trend growing in South Florida over the past years, which has recently been migrating throughout the rest of Florida, and this trend is the assigning of benefits, specifically to roof contractors. To briefly explain, assignment of benefits is when you sign over the rights to your policy to a third party (usually a contractor). The problem here, and why it is affecting insurance rates, is that once you assign the benefits over to the roof contractor, they are now dealing directly to the insurance company. Doesn’t sound like a big deal, but the problem lies in the bad dealings of a growing number of roof contractors (not all roof contractors, but enough to change overall rates) who provide bids to the insurance companies for 50% to 100% (or more) above the actual cost to redo the roof. And when the insurance companies deny the amount (rightfully so based on actual estimates of repairing the roof) the roof contractor sues the insurance company (since they now have the rights to the policy benefits) knowing that the insurance company will, 9 times out of 10, settle since doing so is less expensive then going to court. This problem goes even deeper then this, but we want to keep this article simple. 
     2. Recent hurricanes (obvious reason, I know)
Irma alone caused close to 8 billion in property damage in Florida, and Matthew causing 1.5 billion. These considerable losses create a void in insurance companies reserves (the amount they are required to keep to be able to pay out future claims), and so must raise rates to fill the void or face possible solvency by the state.
     3. Reinsurance rates go up.
Believe it or not insurance companies have their own insurance policies called re-insurance (crazy right) that kick in after major catastrophes to help cover some of the losses that would otherwise cripple the insurance companies. These policies are very expensive and once a state has had a recent catastrophic loss (or losses) these rates go up, and soon home insurance rates follow.      

​Simple solutions to help lower your rate.

1. Applying wind mitigation credits.

If you have a home that was built prior to 2002, but have had the roof replaced since 2002 then we recommend you have a wind mitigation done and submit it to your insurance agent as soon as possible. The inspections are low cost ($75 here in Volusia and surrounding counties) and can save you hundreds depending on which credits you have. Even minimal credits typically pay for the cost of the inspection and the credits are good for 5 years (so after the first year you have 4 years of savings).
     2. Lower contents coverage
The standard amount of contents coverage on a home policy is 50% of the dwelling amount, so if your home is insured at $200,000 your contents coverage would be at $100,000. Once you consider the policy caps on certain items like jewelry, art, etc. (which are typically capped at $1000 to $2500 depending on your policy terms). Some homeowners simply don’t need 50% of their dwelling amount for contents.  
    3. Shop around.
Like everything else in the world no insurance company is a one size fit all. Every company has an appetite of what type of risk they are looking for (age of home, zip code, personal insurance score, etc.) and simply finding that right match can save hundreds. Independent insurance agencies are a great resource for this since they typically are contracted to write for many home insurance companies (usually 10 or more) and can help guide you to the right fit while also educating and consulting you along the way.
 
I hope this article helps! I tried to keep it as unbiased as possible. If you have any further questions I would recommend you contact your local independent insurance agent, or us :)  for we would be more than happy to help! http://www.wellcoveredinsurance.com/  
About the Author:
Richard Dixon is the owner operator of Wellcovered Insurance a local independent insurance agency located in Orange City, Florida.

​When we think of safety in our homes, we often think of external factors.  Natural disasters like earthquake, storms, floods, or even animal attacks spring to mind.  We will even secure our homes from burglars and other criminals.  

However, it is often neglected that our homes contain many hazards.  Like the external factors, these pose a threat to our family's safety.  Here are some of the home hazards you should watch out for.

Percentage Hurricane Deductible (most common)
First (and I believe the most mis-understood) is the percentage-based hurricane deductible. The most common hurricane deductible for home insurance in Florida is the 2% hurricane deductible. That 2% does not mean 2% of the damage caused by the storm. The 2% stands for 2% of your dwelling coverage (or Coverage A). Simply put if your policy covers your dwelling at an amount of $200,000 your hurricane deductible would be 2% of $200,000 which equates to $4,000.

Flat Hurricane Deductible (less common)
Less common but becoming more popular (especially with the recent hurricane activity in Florida) is the flat hurricane deductible. A flat hurricane deductible is just that, a flat amount (usually $500 or $1000). This is easier to understand because it is just a flat amount.

​Pros and Cons of Percentage Based and Flat Deductibles
Percentage Based Deductible:
Pros

1. Lower rate. The insurance companies give lower rates for those who choose the percentage-based deductibles. (which makes sense since they will pay out less).
2. During the aftermath of a major storm it allows insurance companies to process overall claims quicker since most of the minor damages being reported won’t meet the higher percentage-based deductibles (this is a pro for those who have major damage not so much for those with minor damage)

Cons

1. The obvious, 2% of the value of the home can be a lot of money and can be difficult to come out of pocket (especially after a hurricane).
2. Most people experience minor damage due to a hurricane (which can still be in the thousands) and these repairs often do not meet the percentage based deductible threshold leaving the home owner financially responsible for the repairs.

Flat Deductible:
Pros

1. The obvious, coming out of pocket a lot less to repair damages after a hurricane. The difference between a percentage-based hurricane deductible and a flat one is usually in the thousands. In the example used above the difference between the standard 2% and a flat $1,000 would be $3,000 less out of pocket.  
2. As stated above, most people have minor damages after a hurricane and with a flat deductible you have a much lower threshold to meet before the insurance company will step in financially (helping to cover thousands of dollars of minor damages)

Cons

1. Choosing a flat hurricane deductible does increase the policy premium (though surprisingly not much and in some cases less than a $100).
2.  If everyone chose a flat deductible (which is very unlikely to happen) it would make it more difficult for insurance companies to settle claims quickly since they will have more smaller claims to handle.

I hope this article helps! I tried to keep it as unbiased as possible. If you have any further questions I would recommend you contact your local independent insurance agent, or us :)  for we would be more than happy to help!

About the Author:
Richard Dixon is the owner and operator of Wellcovered Insurance, a local independent insurance agency located in Orange City, Florida. 

​For every business, the end goal is always profit.  You want to maximize the money coming in and lessen the expenses that you pay.  It sounds simple and basic, but there is so much to it.  You may be able to raise your revenue, but if your costs increase as well, then that is not a good sign.  

As a business owner, you will always look for ways to cut costs without sacrificing your product or service.  You also want to minimize the effects of the cost-cutting to your employees.  Here are some tips you can do to cut your costs now.

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​Keeping your car clean do not only make it look nice but also keeps it new longer. A well maintained and clean car will last you longer and perform better. We spend a lot of time in our cars, and we want to stay in a nice and clean environment. However, when you think of cleaning your car, you most likely picture it being washed down on the outside. What many tend to forget is it is important to clean your car's interior as well. It is where you stay, and you want to make sure it is clean. You would not want to attract pests into your car.  Make sure to follow these steps below to keep your car interior clean.