The trouble with Homeowners Insurance in Fort Lauderdale

Have a roof that looks like this?

Damaged Roof

This post is going to apply to both buyers, and those who currently own a home.  If you currently own a home in Fort Lauderdale there is a decent chance that you have, or had, an insurance policy through Citizens.  If you're considering purchasing a home, or are in the process of doing so, you may have heard about a 4 point inspection that you will need to do as part of the insurance process.  The 4 point inspection is going to encompass the homes electrical system, plumbing system, HVAC system, and the roof.  It's these inspections that are becoming real deal breakers in real estate transactions.  If the 4 point inspection shows any deficiency, it can throw a wrench into your real estate closing.  Today I'd like to go through a bit of the Citizens story, and let buyers and sellers know what they should do right now as a result of Citizens winding down.

I asked Jim Sullivan of J&L Insurance to give me a little commentary as he's on the front lines of the insurance wars.  He wrote me a synopsis that's better than any I could write, so I'll paste it for you guys to read.  " In a nut shell, Citizens is 'the state', not a company, and it was created to be the 'last resort' for insurance. However, they geared the rates to be too competitive with the standard markets and in a very short time, became the largest property insurer in the state. Being the largest comes with a lot of danger, should we be hit by a major storm. Because Citizens is a government entity, they cannot have a deficit. If they go in the red due to an increase in claims, they must assess everyone in the state on their property insurance policies to make up the difference. This includes any auto insurance, boat insurance, basically any kind of “property” you insure."  If you couldn't get a policy anywhere else, Citizens would ensure your home.  With few other insurance companies operating in the state, Citizens grew to be the largest insurer, with the riskiest pool of homes insured.  The cost of that risk was spread to everyone in the state, whether they owned a home or not.  This type of insuring was viewed as unsustainable and Citizens was forced to wind down.

That brings us up to what's happening today.  Let's say you're a buyer and you have a purchase contract on a home.  The 4 point inspection comes back and there's a problem with the age of the roof.  Citizens is winding down, so they don't want to insure the home with the older roof.  However, no other carriers do either.  The result is the contract is broken and the deal falls apart.  Standard carriers only want to insure homes in great condition.  This has left an untold number of homes in Fort Lauderdale facing rapidly rising premiums, if they're offered coverage at all.

If you're a home owner what should you do?  If your roof has less than 5 years of life left on it, and you're looking to sell, it may be in your benefit to replace the roof.  This would keep you from having the issue come up at the time of sale, and honestly, it's a lot easier to sell a home with a new roof.  Buyers always ask about roof age, and whether windows are impact glass.  Keeping your home up to date should also help keep your insurance costs under control.  You may want to have a 4 point inspection done on your home before listing it for sale.  This can identify issues so they can be resolved before the time of listing.

If you're a buyer what should you do?  First is to include a Homeowners/ Flood Insurance addendum into the purchase contract on single family home transactions.  Second is to have a full home inspection done, along with a 4 point inspection report.  If you're looking for a fixer upper, its tough to get policies on this type of home right now.  Even if you can find financing, with no insurance policy, your financing will fall through.  You can avoid a lot of this by knowing the age of the roof going into a deal.  The roof, more than any other item, is what I'm seeing deals fall apart because of.  If a homeowner says the roof is 20 years old, know that may be a problem for you!

There's a lot to say about insurance.  This was just meant to be a broad overview.  For those purchasing, and those who own, it's crucial to understand your homeowners insurance policy.  If you have specific questions I would give Jim a call.

Jim Sullivan
J&L Insurance

If you want to know how insurance may impact a real estate transaction, feel free to call or email me.

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I work as a Realtor in Southeast Fort Lauderdale. If you’re interested in buying or selling a home, condominium, or townhouse (townhome) in: Rio Vista, Victoria Park, Downtown Fort Lauderdale, Fort Lauderdale Beach, Sailboat Bend, Tarpon River, Croissant Park, Collee Hammock, Wilton Manors, Poinsettia Heights, Coral Ridge, or Las Olas Isles, please feel free to contact me at (786)443-7203 or through my email I am a Realtor that works on Saturdays in order to accommodate those with busy schedules. is a trusted source for real estate trends, statistics, and data, as well as aesthetics.

Written By Casey Prindle