Homeowners insurance is not a legal requirement in Florida. However, you can still face serious ramifications if you decide to skip getting homeowners insurance.The most important of these? Not having the protection you need when you experience a loss due to damage or a liability claim.
That said, you can choose to self-insure and absorb the risks that come with forgoing insurance if you own your home outright. Choosing to self-insure puts you on the hook for the cost of repairing or rebuilding your home if it’s severely damaged or deemed a total loss. If you cannot afford the expense, then you may be forced to move and sell the damaged property at a loss
Unfortunately, many Florida homeowners take this risk. The state has the ninth-highest rate of homeowners without coverage.
Going without homeowners insurance when you have a mortgage
Most – if not all – mortgage lenders require you to carry homeowners insurance on your property. This protects the lender’s interests in your home as a collateral aspect of the loan.
Should your homeowners insurance lapse, your lender may purchase insurance for your property. This is called force-placed or lender-placed insurance, and the cost for this coverage comes out of your pocket, often in the form of higher monthly mortgage payments.
You should note that force-placed insurance generally does not cover your personal property or liability. Moreover, it’s usually much more expensive than homeowners insurance you secure privately or through a state-run program.
The additional expense can be a big problem, especially if the premium does become a part of your mortgage payments.The extra expense may cause you to default on your loan if payments aren’t made on time, and that could ultimately lead to your home being taken by foreclosure.
Before allowing your home insurance to lapse, consider your options. You could compare insurance providers to save money or perhaps increase your deductible to lower your premiums.
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Homeowner’s insurance has become a real challenge in Florida. We specialize in homeowners insurance in catastrophe-prone areas. Contact us today, for your quote and to get your questions answered.
