Florida landlords - how are you doing with your insurance?

[Sam Leon]

I have to say, my insurance is becoming very difficult to manage.

Down here in Florida, because of hurricane threats, we have to carry, for a rental property, a dwelling policy, a windstorm policy and a flood policy. The flood policy may or may not be necessary depending on what flood risk zone you are in. The good news is due to the last FEMA flood map update in our county, I was able to get my flood insurance rate changed on many of my properties, and the annual flood rate went from over $2000 to just over $400 per year for some of those properties.

For a while there many insurance carriers are not taking new policies in the state, so the only carrier that we can buy new policies from was Citizens.  Recently I have been receiving letters from Citizens stating my policy at this address is being transferred to other take out insurer, and my policy at that address is being transferred to another take out insurer...my agent told me if we opt out of this switch, I run the risk of Citizens dropping us because we were given a chance to switch and refused.

When they do the take out policy, they might do it one policy at a time.  So now I have for one single property, Dwelling was being taken out to "Heritage Insurance", Windstorm with "Weston", and flood staying with AllState.  These new insurers I have never heard of, a quick Google some of these are new companies with no history to speak of.  I saw one news article saying these insurers will hike your rate by 25% easy come renewal time.  Another news article says a Tampa based take out insurer went insolvent and many people lost a portion of their premium and then they went back to Citizens.

Last count, just on seven properties I have in additional to Citizens, policies with ELEVEN other insurance carriers, ELEVEN!  How do you all manage this crazy fragmentation?

and how do you deal with being switched to these unknown new insurers?  If you opt out of the take out offer, and stay with Citizens, you risk being dropped, and you risk having a 45% premium hike in the event of a major hurricane and Citizens runs out of funds.  If you don't opt out you are now stuck with a total unknown company who is sure to raise your premium come renewal and you have no out, you can't walk out of it.

Finally, I don't have an umbrella policy, and I think it's time I get one.  Any advice?  Who with?  What is the typical amount you insure for?  A million?  2 millions or more?  Does an umbrella policy cover your own residence too or just rental properties?

Thanks in advance.

[Wes Eaves]

@Sam Leon My insurance agent told me that if premiums increase, then you can switch your policy back to Citizens if the insurer that is assuming your policy increases the premium by 15%.