Dropped from your home or flood insurance policy? Here's what to do
Homeowners in Florida pay more for their insurance than most of the nation, at more than $4,000 each year on average, almost three times the national average for home insurance rates.
With each year and each hurricane season, the cost for homeowners insurance in Florida increases exponentially faster than the national rate.
Statewide, an ongoing insurance crisis rages on and the 2023 hurricane season is underway.
During the 2022 hurricane season, many insurers started to scale back their policy options for Floridians, sparking a hike in the already-high cost for Florida homeowners to insure their houses against damage from the state's frequent thunderstorms and hurricanes.
Some insurers left the Sunshine State altogether and others went out of business.
So, what's a Florida homeowner to do if their home or flood insurance policy drops them?
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Can your home or flood insurance policy just drop you?
It sounds unfair, but an insurer can drop you without you even having made a claim. Insurance companies are worried about risk. When they sell you a policy, they do so in hopes that you'll never have to file a claim and receive a payout.
The likelier it is that you will file a claim for storm or flood damages, the warier they are of issuing policies.
You may think you're safe because you aren't in a flood zone, but anyone living in Florida could be dropped from their homeowners or flood insurance policies.
According to an April survey from AAA, almost 60% of the Floridians surveyed said that they feel safe because they aren't located in a flood zone. But the AAA says that almost 40% of all flood insurance claims come from homes that aren't in high-risk flood zones.
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What's the difference between flood and homeowners' insurance?
Flood insurance is not inherently included in homeowners' insurance. Flood insurance is exactly as described; it covers costs for flooding damage.
But homeowners' insurance covers damages from fire, smoke, theft or vandalism, damage caused by a weather event such as lightning, wind, hail or a fallen tree. Homeowners' insurance may also cover heating and cooling systems, kitchen appliances, furniture, clothing and swimming pools, depending on your policy.
How long does an insurance company have to cancel a policy?
According to Florida law, for insurance policies that have been active for more than 90 days, insurance companies must give an insured customer a 45-day notice before deciding to or not to renew their policy.
"If the policy is not to be renewed, the written notice shall state the reason or reasons as to why the policy is not to be renewed," the statute says. "This requirement applies only if the insured has furnished all of the necessary information."
The same rule goes for when an insurer decides to cancel or drop a policy. They must give the insured customer a 45-day notice of their policy cancellation.
Insurance customers who have been covered by their policy for at least 90 days do have some protections written into state law.
"After the policy has been in effect for 90 days," the law says. "No such policy shall be canceled by the insurer except when there has been a material misstatement, a nonpayment of premium, a failure to comply with underwriting requirements established by the insurer within 90 days of the date of effectuation of coverage, or a substantial change in the risk covered by the policy."
What is the difference between an insurer canceling a policy and not renewing a policy?
Cancellation happens when an insurer "just drops" you, meaning they've notified you that your coverage will end before your coverage period ends.
Non-renewal is when your insurer decides not to renew your policy at the end of your coverage period.
Reasons your insurer may choose to cancel or not renew your coverage
A state insurance regulator may allow an insurer to cancel policies while they’re still in effect for reasons that aren't the fault of the insured, like flood or storm damage risk.
You don't pay your premium.
You committed insurance fraud or misrepresented your information on your application.
You don’t make the repairs requested by your insurer after a home inspection that was ordered by the insurer.
An insurance company reduces the amount of policies it is willing to renew or sell in your area because of frequent natural disasters leading to a lot of claims in the area.
An insurance company pulling out of the insurance market in your area altogether.
Your insurance credit score dropped.
You filed more than one claim.
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My insurance policy was dropped, what do I do?
You can file a complaint with the state's insurance regulator if your insurer did not give a notice or a reason for your coverage cancellation or non-renewal.
If your insurer dropped you because they've assessed that you live in a high-risk zone, you can try to combat that by showing documentation or evidence that your home is not located in a high-risk area.
If you are in a high-risk area, you can still attempt to dispute this if you've completed severe weather mitigation measures for your property.
Regardless of if you dispute the cancellation or non-renewal, take advantage of the 45 days you have to shop for a new insurance policy. Try to have your new policy in place before the old policy expires to avoid a lapse in coverage. Both homeowners' and flood insurance typically take up to 30 days to take effect.
How can I find new homeowners insurance?
If you're having a hard time finding a new policy, you can begin searching with the Florida Office of Insurance Regulation's Homeowners Rate Comparison Tool. You can use this comparison tool to search for sample average insurance rates by county to start your search for a policy that will work for you.
If you've found a coverage plan that looks like it may work for you, you should use the Office of Insurance Regulation's Active Company search tool. You can also check to see if the insurance provider is legitimate by calling the Florida Department of Financial Services' free consumer helpline at 877-693- 5236.
If you haven't been able to find coverage with a Florida-authorized insurance company, Citizens can help. Citizens is the state's not-for-profit, tax-exempt government entity that provides property insurance to Florida property owners unable to find insurance coverage in the private market. To find a policy with Citizens, you'll need to use the agent look-up tool to find an authorized Citizens agent near you.
To be eligible for a new insurance policy through Citizens, your property must meet one of the following criteria, according to the Citizens website:
Coverage is not available from a Florida-authorized insurance company.
Premiums for coverage from Florida-authorized insurance companies are more than 20% higher than the premiums for comparable coverage from Citizens.
Can I get insured during hurricane season?
There are certain times when buying homeowners' insurance isn't possible in Florida. You can sometimes buy homeowners' insurance during hurricane season, but not always. When insurance companies issue a policy, they're hoping you won't have to file a claim. The likelier it is that you will file a claim for storm damages, the warier they are of issuing policies.
This is why most insurance companies don't sell homeowners' insurance 24 to 48 hours before a storm is anticipated to hit the state. Rules around when you can and can't buy homeowners' insurance vary depending on which insurance provider you buy from, but is usually difficult to acquire during hurricane season no matter who you insure with.
Lianna Norman covers trending news in Palm Beach County for The Palm Beach Post. You can reach her at lnorman@pbpost.com. You can follow her reporting on social media @LiannaNorman on Twitter.
This article originally appeared on Palm Beach Post: Home and flood insurance: What to do if you get dropped
