One very major expense consideration in a home purchase is the associated hazard insurance. Your mortgage lender should have the contacts to assist you in obtaining competitive premium rate quotes. We at Florida State Mortgage Group, Inc typically will request quotes from at least 3 separate insurance agents. This process has resulted in significant savings to our borrowers. We have insurance agents located in Miami, Fort Lauderdale and Orlando that provide us very competitive rates to share with our borrowers.
Borrowers should understand that in Florida hazard insurance rates can vary based on lots of different factors. Fort Lauderdale, Miami and West Palm Beach and the Florida Keys typically have the most expensive hazard insurance premiums. Comparatively, the greater Orlando area has rates that are probably on quarter of the same style and priced home located in the south Florida market.
The primary cost driver in hazard insurance premiums in the south Florida (Fort Lauderdale, Miami, West Palm Beach areas) market is wind storm coverage. This is mandatory coverage as it provides coverage for loss due to wind driven rain most commonly associated with a hurricane. This coverage should not be confused with flood insurance.
Flood insurance is usually much less expensive and only required if the property’s structure in located within a flood zone. An elevation certificate obtained at the time of the property’ survey will be necessary to obtain an accurate flood insurance premium quote. The premium rates should be the same regardless of the insurance provider as all NFIP (National Flood Insurance Program) premiums are established by NFIP.
Depending upon the age of the home and typically when the home was built prior to 2004 it’s an excellent idea to obtain two additional and separate inspection reports; 4 point inspection report and wind mitigation report. The 4 point inspection may be required by the insurance carrier. The wind mitigation report can result in significant savings. The wind mitigation report will identify cost savings improvements to the structure such as impacts doors and window, how the roof is attached (clips, wrapped, double wrapped, etc), reinforced garage door and building code utilized when the property was built along with a few other considerations.
In the end the borrower can select both the flood and/or hazard insurance from any insurance company of their choice. It is not legal to require you to utilize any specific insurance company. The insurance options can be confusing and all borrowers are encouraged to speak with the agents in great detail as we are not insurance agents.