A Guide to Florida Landlord Insurance
Boasting everything from white sand beaches and amusement parks to vibrant nightlife and entertainment, Florida is among the top vacation destinations in the United States — not to mention a leader in the rental property market.
But sunny skies and subtropical temps come at a steep cost to homeowners, particularly for coastal properties with a much higher risk of damage from hurricanes, storms, and flooding. The average annual cost of Florida landlord insurance is $2,450, while the national average is about $1,478 per year.
Learn what factors affect the price of Florida property insurance, why you need it, and how to find the best coverage at the lowest cost for your rental properties.
What is the difference between landlord and homeowner insurance?
While both landlord and homeowner insurance offer property protection, they cater to different needs based on how the property is used. Landlord insurance is tailored for individuals who own property that they lease out to tenants.
It primarily provides coverage for risks commonly associated with rental properties. This includes dwelling protection, which may cover damages from events like fire and vandalism, and liability for injuries on the premises.
Coverage for potential loss of rental income if a property becomes uninhabitable due to certain events, is also available, though the specifics can vary widely by policy and provider. In Florida, where the insurance market faces unique challenges, these coverages may not be standard across all policies. Landlords may find that some major carriers do not include all of these protections as part of their standard offerings, and therefore, it is essential to review policies carefully.
Optional coverages can be particularly important, as they can be tailored to address unique risks, including tenant-caused damage, which may not be routinely covered.
On the other hand, homeowner insurance is designed for properties where the owner resides. It commonly covers the physical structure of the home and its contents, offering protection against theft, damage, and destruction of personal belongings in a covered claim.
It also includes liability protection, covering medical or legal expenses if someone is injured on the property. Additionally, if the home becomes uninhabitable due to a covered incident, many homeowner policies will cover temporary relocation costs, like hotel stays. Unlike landlord insurance, homeowner insurance does not generally consider tenant-related risks or loss of rental income.
What Does Landlord Insurance in Florida Cover?
Landlord insurance, frequently termed rental property insurance, is geared toward individuals who lease their properties to others. While not a mandate in Florida, seasoned landlords regard it as indispensable because it shields them from substantial financial setbacks from legal challenges, fire incidents, water-related damages, or other unexpected occurrences.
These insurance policies encompass protection against a range of common threats, from fires, storms, and floods to thefts and malicious activities. However, policy specifics can vary, meaning it's essential to understand the details of your chosen package.
Some policies offer enhancements such as protection against unintentional damages, acts of terror, and even potential legal confrontations. Further options can cover possible rent defaults, costs of temporary housing for tenants, and the property owner’s contents within the rental property.
In Florida, a typical landlord insurance package may consist of:
- Dwelling protection: Addresses expenses for restoring a rental property impacted by covered losses like those from fire, floods, or windstorms.
- Liability coverage: Takes care of legal and associated costs if a person sustains an injury within the property premises.
- Loss of income: Ensures landlords receive a payment if a property is uninhabitable due to covered losses.
- Property coverage: Protects the landlord’s possessions within the rental space, from furnishings to appliances.
- Medical compensation: Handles medical bills if a guest or tenant is injured within the rental vicinity.
However, it's vital to remember that landlord insurance focuses on the landlord's interests, insured property, and assets. Tenant-owned belongings or concerns aren't typically under its purview.
Why are landlord insurance rates so high in Florida?
Landlord insurance policies, by nature, tend to be around 20% more costly than standard homeowners' policies. The reason? Tenants are often perceived as a heightened liability, leading to an increased risk of property damage.
However, in Florida, this baseline increase is further intensified by a medley of state-specific challenges:
- Catastrophic weather events: Florida is no stranger to the destructive power of nature. Wildfires, hurricanes, tornadoes — you name it, Florida faces it. According to a study from ValuePenguin, these events cause an average property damage of $344 billion yearly in the state. To put things in perspective, Hurricane Michael in 2018 inflicted damages worth $9.9 billion across Florida.
- Essential protection: Given Florida's susceptibility to extreme weather, landlord insurance isn't just a protective measure—it's an imperative—claims for wind and hail damage alone average $11,000 annually. Water-related damages aren't far behind, averaging $9,000 yearly.
- Theft and burglary: Beyond natural calamities, human actions also play a role in the soaring insurance costs. In Florida, yearly building damage claims due to theft and burglary stand at an unsettling $4,000.
- Recent tragedies: The Surfside condo collapse in Miami, a disaster that resulted in the tragic loss of at least 97 lives, has had significant repercussions in the insurance domain. Post this incident; numerous insurance companies mulled over discontinuing coverage for older edifices not in compliance with the latest safety codes. This event and Florida's unpredictable weather conditions amplify insurers' hesitancy in covering coastal properties.
While landlord insurance is intrinsically more expensive, Florida's unique challenges — from relentless weather onslaughts to human-induced tragedies — drive these costs even higher.
How much insurance do I need for my Florida investment property?
While some states and zip codes require minimum coverage or specific policies — as do mortgage companies — choosing how much insurance you buy is mostly a personal decision. That said, there are some essential factors to consider when setting the limits of your personal property and liability insurance coverage, including:
- Your property’s unique risks: Are you on the coast? Close to a body of water? In a high-rise building? If so, your property may be more susceptible to damage from wind, water, and other natural perils. Be sure to have coverage for these hazards, and ask your agent to recommend other policies or coverages that may help you be more comprehensively protected.
- How much of your personal property is available for tenant use? What personal property can tenants use, and how expensive is this property? This helps determine your personal property limits on a landlord insurance policy.
- Your personal risk tolerance: What makes the most financial sense for you? Are you willing to have a higher deductible for lower premiums?
Important considerations for Florida insurance
Though Florida property insurance is not required by law, it's essential to protecting your investment. Suppose you're thinking about getting Florida landlord insurance. In that case, you will most likely need to pass a four-point inspection that allows insurance companies to see the status of your property and determine risk factors before providing coverage.
The inspection examines the following elements of your property:
- Roof: The covering material, age and condition, and existing leaks or damage.
- Electrical system: The type of wiring, electrical panel functionality, and overall condition of your electrical system.
- Plumbing: The type of supply and drain lines, age and condition of your plumbing system, and any signs of leakage.
- HVAC: The property's air conditioning and central heating, age and condition of units, and any signs of leakage.
Passing this inspection is mandatory to obtain Florida property insurance from a growing majority of carriers — so be sure that your property is safe and up to code before the inspector arrives at your door.
Tips for lowering your insurance premium
Your premium depends on several factors, including geographic location, property condition, and claims history. You can also change your rates by adjusting your desired coverage and deductible. Here are a few tips to help you lower your Florida property insurance premiums:
1. Schedule a wind mitigation inspection
A wind mitigation inspection, or a windstorm mitigation inspection, is when a certified professional looks over your property for specific weather-withstanding features that could help decrease property loss from hurricane winds.
This includes an inspection of door and window coverings, roof attachments, water resistance, and how well the roof is sealed to prevent water damage. Though a wind mitigation inspection is not mandatory to get Florida property insurance, the average cost of this inspection is an average of around $100 — and can save you hundreds or even thousands of dollars on your annual premium. These inspections are also valid for five years and will help you discover what additional improvements you can make to your property to prepare for future disasters.
In advance of your wind mitigation inspection, familiarize yourself with the following information:
- Building code
- Roof covering
- Roof-deck attachment
- Roof-to-wall attachment
- Roof geometry
- Secondary water resistance
- Opening protection
2. Consider raising your deductible
In Florida, you have the option to adjust your standard deductible, as well as your hurricane deductible, to reduce your premium. For this reason, raising your deductible can be a strategic opportunity to lower your premium. That said, ensure you are taking on a manageable deductible if you need to make a large claim.
3. Relocate strategically
As a rental property owner, you understand the unique pressures of renting your home to tenants — especially on the coast. If you are considering relocation, opt for an inland property far away from the water but still in a desirable destination. By reducing your property's risk of hurricane damage, you can save significant cash on Florida property insurance and annual premiums.
4. Partner with a specialized local insurance agent through Azibo
Navigating lengthy property insurance policies is difficult in any state, especially Florida. Committed to enhancing the landlord experience, Azibo has a specialized team of partner agents who are experts in the Florida insurance market to help find the right coverage at the right price for you.
According to NerdWallet, the average cost of homeowners insurance in the U.S. is about $1,820 per year. This would mean the average landlord premium is approximately $2184 per year. Yet many Azibo customers pay annual premiums well under $1,000 for landlord coverage. We're proud to provide quick access to a curated set of high-quality insurance carriers — so you get the right coverage at the right price.
Ready to put insurance headaches and hassles in the past? Azibo is here to help. Simplify the Florida property insurance process and get your free quote today.
Landlord insurance FL: Moving forward with confidence
Owning rental property in Florida presents a unique set of challenges but also offers incredible opportunities in a thriving vacation and residential market. While the state's beautiful coastline and vibrant cities entice tenants, the associated risks from weather events and other damages underscore the importance of a robust landlord insurance policy.
Being well-informed about the distinctions between landlord and homeowner insurance, the specifics of coverage, and the factors affecting premium costs ensures that property owners are both well-protected and financially savvy. While Florida's landlord insurance rates might be higher than the national average, proper preparation, understanding policy specifics, and partnering with specialized agencies like Azibo can ease the process and potentially reduce costs.
Securing the right insurance is not just about compliance or checking off a task; it's about peace of mind. Knowing that your investment is safeguarded allows you to focus on maximizing the potential of your property and providing the best experience for your tenants. So, whether you're a seasoned landlord or starting, prioritize Florida landlord insurance. Your future self—and your wallet—will thank you.
Looking for more state-by-state insurance guides? Check out these resources:
Landlord insurance in Florida FAQs
How much is landlord insurance in Florida?
Landlord insurance in Florida can vary in cost depending on several factors, such as the type of rental property, the exact coverage options selected, and the insurance company providing the policy. Typically, Florida's landlord insurance premiums might be higher than in other states due to the increased risk of natural disasters like hurricanes and floods.
On average, insurance premiums for rental property owners might range from $1,000 to $3,000 annually. However, this can fluctuate based on the property type and usage (commercial or residential rentals), whether single or multi-family homes, and the specific property insurance features chosen. It's also influenced by optional coverages that can be added to the landlord's policy. Consulting with landlord insurance providers in the state can give a more precise estimate tailored to individual properties and the additional coverage they need.
Are landlords required to have insurance in Florida?
While Florida law doesn't explicitly mandate landlords to carry rental property insurance, it's highly advisable. Given the unpredictable weather and potential for property damage in the state, landlord insurance coverage is a financial safety net.
Many experienced Florida landlords and real estate investors deem it essential, especially when considering potential legal liabilities and the need for dwelling protection against natural disasters. It's also worth noting that while landlords might not be legally obligated, mortgage companies might require property insurance as a condition for financing.
Who sells landlord insurance in Florida?
In Florida, numerous insurance companies offer landlord insurance, ranging from large national providers to local firms attuned to the state's unique needs. For those who cannot find coverage on the private market, Citizens Property Insurance Corporation provides a valuable safety net, ensuring that all eligible property owners have access to the necessary protection.
Azibo Insurance Services LLC f/k/a Zibo Insurance Services LLC, a wholly owned subsidiary of Azibo Inc., is a licensed insurance producer. Contact us to discuss your specific insurance needs.
Disclaimer: The information provided in this post does not, and is not intended to, constitute insurance advice; instead, all information, content, and materials are for general informational purposes only. This content may not constitute the most up-to-date insurance information. Readers must contact a licensed insurance agent or company to obtain quotes, advice, and guidance with respect to any insurance matter. No reader, user, or browser of this article should act or refrain from acting on the basis of information herein without first seeking the advice of a licensed insurance producer.