Florida has a public insurance plan to address the difficulties of getting traditional insurers to cover waterfront properties, and more coastal states may soon develop similar plans. There are two crucial factors to compare before you decide that public property insurance is your only reasonable option.
Costs and Coverage
When you compare traditional private and public insurance plans, the differences come down to cost versus benefit. Private property insurance market challenges revolve around obtaining it and being able to afford it. Private insurers are becoming hesitant about insuring coastal property, and many are hiking premiums to unattractive levels. Conversely, affordable publicly subsidized property insurance usually has less generous coverage than you may need. Saving on premiums in the short term could therefore prove costly in the case of a loss that exceeds your state-sponsored insurance benefits. You should also consider the impact of possible changes to the laws regarding publicly funded insurance.
Your Circumstances Decide
Your property’s unique value and level of risk can help you determine whether to opt for a more costly private plan or settle for the basic public coverage. If you own multiple properties or have improvements that aren’t covered under the state plan, you may prefer to pay more for the higher coverage and policy add-ons that a private insurer can provide. If you have a modest home and sufficient emergency savings, the state’s nonprofit plan may be good enough.
Weighing public versus private property insurance is a high-stakes choice. That choice should balance personalized preferences against financial realism.
