Wind Coverage Insurance: Why a Homeowner Should Not Opt Out

You may remember that in 2006 Florida passed a law making it easier to opt out of wind coverage insurance in the midst of the negative reaction of voters over soaring premiums, and the practice was also adopted in other states, particularly those along the Gulf Coast hit hard by the storms in recent years. With the close call of Hurricane Isaac many home owners in Central Florida are glad that they did not opt out of keeping their wind coverage insurance.

While the option of doing without wind coverage insurance is generally limited to people who don’t have mortgages — banks typically require borrowers to carry insurance — even a slender increase in those going uncovered could have broader repercussions in the wake of another major storm. A drop in insurance payouts could leave storm-struck areas with fewer resources for rebuilding and shift some of the burden to taxpayers. That more individuals are opting to go without coverage also underscores the breakdown of the insurance system in coastal areas.

Nobody tracks how many Americans are going without wind coverage insurance, and it’s likely still rare — most homeowners do have mortgages and 96% carry some kind of home insurance, which often includes wind coverage, according to the trade group Insurance Information Institute. Moreover, in some coastal states, wind coverage is typically included as part of a general policy, making it harder to drop. Nevertheless, it occurs, and is on the increase.

Blue tarps in Orlando because of wind damage from hurricanes.

After the devastating hurricanes in 2004 and 2005 caused more than $150 billion in damages, much of which they had to pay for, insurers have thus increased rates dramatically while dropping clients they consider high-risk. Home owners also experienced a sharp jump in premiums for wind coverage from private insurers, which doubled or tripled in some coastal areas. Some homeowners that are experiencing financial hardships are doing the math and opting to bet against Mother Nature when they drop wind coverage on their homeowners insurance policy.

Please, with this information in mind, contact your Erb and Young Insurance Agent to discuss your Homeowners and Commercial Insurance policies. Making informed decisions and taking responsible actions now will help you to maintain, protect and enhance the value of your personal and business properties.

Erb and Young Insurance is an Independent Insurance Agency that works with multiple of insurance carriers to bring you personalized solutions and service for your personal and business insurance needs. We offer a complimentary asset overview and policy evaluation that will save you both time and money.  Contact Erb and Young now to acquire a customized Insurance policy that is the right fit for you and your budget. Get the peace of mind that you deserve by calling us now at 321-234-1690.


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