Insurances are required in the Keys if you have a mortgage. If you are a cash buyer, insurance is not required! Some homeowners "self-insure" that is, they choose not to purchase insurance for the savings in not paying the premiums. The latter is not recommended!

Insurance costs vary widely depending on whether it is a primary residence, second home, or investment property. The amount of your deductible will affect the insurance premiums. The 3 types of insurances are wind, flood and homeowners’. The average total for a typical home runs around $8-13k, with extremes from $6-30k! The cost is higher for larger homes.

Wind Insurance is for protection of the home from strong winds. We have the strongest building code in the country, so Citizen's is still available to us here in Monroe County for wind insurance. For a typical single-family home, the average is $4 -7k. If the value of the structure itself is appraised higher than $1m, private insurers need to be sought at a much higher price point. A private appraisal can be obtained to adjust the value.

All openings (doors, windows, etc.) need some form of protection (Class A protection is best) to qualify for wind mitigation credits to lower your insurance costs. That protection can be in the form of panels, shutters, or impact windows and doors. Any shutters or panels must meet current building code. Clamshells and older Bahama shutters don’t qualify for those credits.

The other factor for wind insurance is the roof. Insurances require that the roof not be older than 20 years, be in good condition (no leaks), and require your inspector to look to see how the roof is strapped down! The number and type of straps; are they nailed or screwed in? How many are used? If the roof is older, a licensed roofer or inspector can issue a roof certification report, which will buy you a few more years before you need to replace the roof.

The shape and size of the roof are also factors in the cost of your wind insurance. Concrete roofs are the best, closely followed by metal, then tile and shingle. Most condos include the building exterior insurance as part of their HOA fees. Townhome owners tend to be responsible for the exteriors of their homes.

Update 2023: Wind insurance now requires that a property also carries flood insurance.

Flood Insurance is now required by lenders on most properties in the Keys, even properties that are in the FEMA flood zone of X, though at least the coverage is at a minimal cost. There are 3 designations for flood zones, VE, AE, and X. VE is direct coastal waterfront, with the highest risk of flooding. Most structures are located in some AE Zone. The most common AE numbers are AE6 - AE11. The lower the number the higher the land in relation to the water.

An Elevation Certificate (EC) is required to determine the relationship of the Floor Living Area (FLA) to the FEMA flood zone. That shows if the property is above flood, at flood or below flood levels on the FEMA map. All structures built after 1975 were required to be built at flood, and in the last few years, the code changed so that all structures have to be built 1’ above flood.

Properties built with ground level FLA prior to 1975 that were built below flood, are considered to be legal nonconforming (to current code) and are grandfathered in for insurance purposes Those below flood FLA’s are insurable. Any structure built after 1975 that has living area below flood is ILLEGAL nonconforming and is NOT insurable!

The higher the structure is above flood, the lower your flood insurance costs. Conversely, the lower a structure's FLA is below flood in relation to the zone the structure is in, the higher the insurance costs! We have seen flood insurance as low as $600 a year and as high as $23,000 a year! The average flood insurance tends to be between $3-5000 for single family homes. Most condo buildings include flood insurance as part of their condo fees.

So, let’s say that a home is in the flood zone of AE8. The EC shows the base floor elevation at 9'6". That means that that home is 1’6” above flood. But what if the EC showed that the base floor elevation was only 7'3" in the same AE8 zone? Well, that home would be 9” below flood. Insurance rates would be higher, but not nearly as much as a home that is say, 3’ below flood.

Homeowners insurance typically covers the contents of your home, fire, hazard, and liability. If you are in a property where the HOA fees cover exterior building insurance, then you will need an HO6 policy, also called walls-in insurance. You may also want to consider additional HW6 wind policy to cover personal property/contents in the unit and the interior of the unit. If you are renting the property, different insurance policies are available that cover the business activity or loss of use. Vacation rental insurances vary and if you are renting a lot, business interruption insurance may be an option to look into as well.

All information regarding insurances is a personal opinion and should not be relied on. Please contact a licensed and registered insurance agent for accurate information.

Please reach out with any further questions to the thekeyslifestyle@gmail.com or call 305-781-5704!

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