Be Realistic About Insurance Costs When Buying a Home in Miami

posted on November 20th, 2010 filed under: Financial Responsibility, Real Estate News

Your monthly payment for a home — assuming you take out a loan — consists of principal, interest, taxes and insurance.  PITI for short.

If you’re not from South Florida, you might not appreciate how expensive insurance is here.  Homeowner’s insurance can easily cost 1% to 1.5% of the home’s value per year.  And those are non deductible, after-tax dollars.

But you can’t do without it.

Hurricane Andrew -- NOAA Radar Image

Hurricane Andrew

Insurance varies depending on the size of the home, the exact location and the type of construction, among other things.  Older homes like the classic Old Spanish houses in Coral Gables can be very costly to insure, not because they aren’t generally built well but because their roofs are not fastened to the rafters and exterior walls the way current building codes would require.

Windstorm mitigation can make a huge difference in your premiums.  On an old house, going from no mitigation to impact windows and a roof retrofit can probably save 25% to 50% on premiums and pay for itself in a fairly small number of years.

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posted by // This entry was posted on Saturday, November 20th, 2010 at 12:01 am and is filed under Financial Responsibility, Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed.

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