Wind-Only Insurance Policies in Florida – What Agents Need to Know

The high risk of damage caused by windstorms and hurricanes in Florida makes windstorm insurance a must. Even though there is usually a defined hurricane season, severe storms and high winds are the norm in many areas, so it's important to be protected at all times. For insurance agents who want a deeper understanding of the intricacies of wind-only policies for their clients, this brief guide will tell you everything you need to know.

What is Wind Only Insurance?

Wind-only insurance is a type of property insurance that specifically covers damage caused by wind-related events, such as hurricanes, tropical storms, and strong winds. Given Florida's high susceptibility to hurricanes, this insurance is designed to cover properties at risk of wind damage, especially in coastal areas.

Who Needs Windstorm Insurance in Florida?

In high-risk coastal areas, known as “wind-pool” or “wind-borne debris” regions, insurance companies are generally required to include windstorm coverage in homeowners' policies. These areas are designated by Florida law as being particularly vulnerable to hurricane-force winds.

Florida statutes allow homeowners in certain circumstances to waive windstorm coverage. This option is typically available to those who fully own their home (i.e., no mortgage) and may choose to self-insure against potential wind damage. However, homeowners with a mortgage generally cannot waive wind coverage, as lenders usually require it as part of the loan agreement.

The option to waive coverage is typically exercised by those willing to assume the financial risk or who believe the property is at a low risk for wind damage.

How Does Wind-Only Insurance Work?

Wind-only insurance in Florida covers damages caused specifically by high winds, such as those from hurricanes, tropical storms, or severe weather. Here’s a breakdown of how this kind of insurance works:

Purchasing a Wind-Only Policy

In Florida, many homeowners, especially those in high-risk coastal areas, purchase wind-only insurance because standard homeowner’s insurance policies often exclude windstorm damage due to the state's high hurricane risk.
Wind-only insurance can be bought as a standalone policy from specialty insurers, with many policies available through Citizens Property Insurance Corporation, Florida's state-backed insurer, for those who can’t get wind coverage in the private market.

Deductibles

Wind-only policies typically have a separate deductible specifically for wind or hurricane damage. In Florida, hurricane deductibles are often calculated as a percentage of the insured value of the home, rather than a fixed dollar amount. For example, a 2% deductible on a home insured for $300,000 would mean the homeowner would pay the first $6,000 in damages before the insurance kicks in. Florida insurers also offer $500, 2%, 5%, and 10% hurricane deductibles based on the home’s dwelling limit.

This percentage-based deductible can be substantial, especially for higher-value homes, so it’s important for policyholders to plan for potential out-of-pocket costs.

How Claims Are Processed

If a property is damaged by a covered wind event, your client files a claim and an adjuster goes out to assess the damage and determine the claim amount. After the deductible is applied, the insurance company will cover the repair or replacement costs up to the policy’s coverage limits. Florida law requires insurers to process and settle claims quickly, especially after a hurricane, to ensure homeowners get the help they need for repairs.

Renewal and Rate Adjustments

Wind-Only Insurance premiums in Florida can be adjusted annually based on factors like the home’s location, building materials, and proximity to the coast. Rates often increase following major hurricanes, as insurers adjust premiums to account for the heightened risk and potential future claims.

What Does Wind-Only Insurance Cover?

Wind-only insurance covers structural damage to the home caused by high winds from hurricanes, tornadoes, tropical storms, and similar wind events. This includes roofs, walls, windows, and in some cases, exterior structures like garages or sheds.

This insurance does not typically cover damage from flooding, water intrusion unrelated to wind (like storm surge), or other non-wind-related damage. Many homeowners may need to purchase additional flood insurance or other supplemental coverage to protect against these risks.

Why is Wind-Only Insurance More Expensive in Florida?

Where Florida is situated geographically makes it one of the most hurricane-prone states, which increases the likelihood of claims and makes it more expensive. Windstorm damage accounts for a significant percentage of homeowner claims in the state, which naturally drives up insurance premiums.

Factors Affecting the Cost of Wind-Only Insurance

There are a variety of different factors that affect the cost of wind-only insurance in Florida. Some of the most common ones include:

• The precise location of the property
• The deductible amount
• If any wind-resistant features are installed
• The age of the home
• The construction materials of the house
• The claims history on the property
• If the property is often vacant
  
  

Wind Mitigation Credits and Savings Opportunities

Florida has a hurricane loss mitigation program that offers grants and incentives to homeowners who invest in retrofitting and fortifying their homes against hurricane damage. By installing special features like proper roof coverings, impact-resistant windows, and wind-resistant doors, your clients may be able to get discounts on their windstorm insurance.

How to Get Wind-Only Insurance in Florida

In some cases, private insurers won't provide coverage for wind-only insurance if the client lives in a high-risk area. In these cases, the insurance can be purchased through Citizens Property Insurance, which is a state-run, not-for-profit insurance provider. As an insurance agent, you can help your clients compare quotes for wind-only policies or bundled home insurance with wind coverage so they get the best coverage and the best deal possible for them.

Keeping Your Florida Clients Protected

It's important for insurance agents to make sure their clients are adequately protected at all times. In Florida, this means having the proper insurance to protect against wind damage. You'll also want to keep your clients informed about any available mitigation credits and deductible options so they always feel like they're being taken care of and are in the best insurance situation possible. Wind-only insurance in Florida is not a luxury, especially for those living in coastal regions.

Reach out to us today at Novatae for windstorm insurance solutions that make a difference.

This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.