With property insurance premiums soaring across Florida, some homeowners are doing the unthinkable: dropping coverage altogether.
Jimmy and Heather Riley are one of those couples. After retiring and moving into their renovated St. Pete Beach home in 2007, the Rileys made a choice that’s becoming more common: they decided to “go bare,” skipping wind and flood coverage in favor of saving money each year.
“We had money that we put aside and said, ‘We’re not spending this for anything else unless something happens to the house,'” Jimmy said in an interview with ABC Action News.
“We’ve been putting away $7,000 a year for 13 years, so that’s over $100,000.”
The decision came after hurricanes Charley, Frances, and Wilma battered Florida in the mid-2000s, driving their insurance premium up to $7,000 a year.
Even then, the policy came with a $20,000 hurricane deductible and didn’t fully cover their pool or patio.
“If the hurricane hit and they say $25,000 worth of damage, are we going to put a claim in for $5,000? I don’t think so,” Jimmy said.
“Because then they’re going to raise my insurance.”
So instead of paying for what they felt was inadequate protection, they started saving that money themselves.
They now have a six-figure emergency fund set aside, ready for any future storm damage.
‘Not for everyone’
Industry experts say while going bare may work for a small group of people, it’s not without serious risks.
“Today we are approaching 20% of Florida homeowners not having a property insurance policy,” said Mark Friedlander, a spokesperson for the Insurance Information Institute.
He points to skyrocketing premiums as a key reason. The average cost of a home insurance policy in Florida now runs around $6,000 a year, up 42% from just a year ago.
That’s far above the national average of $1,700.
Still, Friedlander cautions homeowners to think twice.
“Look at the big picture. Is it worth taking the risk that you could lose your home, which in most cases is the most valuable asset families have? Can you replace that out of pocket? Nine out of 10 homeowners absolutely cannot,” he said.
He recommends shopping around, bundling policies, raising deductibles, and looking for discounts before deciding to drop coverage entirely.
A calculated risk
For the Rileys, the decision was a financial strategy. With their mortgage paid off and land value exceeding the home’s structure, they feel confident in their ability to handle a potential loss.
“The house may take you $300,000 or $400,000 to rebuild, but not $800,000. And that’s what they’re going to base your premium on,” Jimmy Riley said.
“Why give an insurance company that’s going to look for every reason not to pay you?”
They also value the speed and control of paying out-of-pocket.
“We wouldn’t have to wait 90 days because the insurance companies have 90 days to respond to your thing. We can start next day and have cash to pay a contractor to start doing it.”
The Rileys admit it’s a gamble. If a major storm had hit in their first year without coverage, their savings wouldn’t have been enough.
Still, they believe it was the right move for them.
“It’s the second-best decision I’ve ever made,” Jimmy said, glancing at his wife.
As Florida’s insurance crisis deepens, more homeowners may consider going bare. But as the Rileys’ story shows, the savings can come at a steep personal risk, and not everyone can afford to take that chance.