Florida homeowners can use this insurance to save money. The agent says, “Please be careful.”

Is it resistant to rising home insurance prices?

Some insurance companies and agents offer ways for clients to save a significant amount of money from premiums, and data shows that more homeowners are taking it.

However, experts warn that strategies can be at risk.

In Florida, sales of the form of insurance known as “housing/fires” are increasingly happening, according to a South Florida Sun Sentinel analysis of quarterly insurance data released by the state Department of Insurance.

The increase outweighs the growth of more traditional “total feeding” policies chosen by most homeowners, the data show.

Residential/fire insurance, also known as “landlord insurance,” is usually sold to a second home owner who seeks protection of the basic structure of the home from a rental property or a fire, hurricane, or other natural disaster. The most basic housing/fire policy does not include coverage for liability in the event of a situation such as a dog bite, flood, loss of use, or in the event that the visitor injures himself with the property of the insured. In most cases, homeowners can add these coverage by purchasing them individually.

The housing/fire policy constitutes only a small part of the homeowner’s policies for sale in the state. The 4,111,091 owners of single-family homes were insured by a nationally regulated insurance policy sold by a nationally regulated insurance company at the end of December last year, while only 771,571 were insured by a residential/fire policy, data shows.

However, since June 2022, data shows that the number of total intake policies has increased by 81,684, while the total intake policies have increased by 47,768.

The insurance agents interviewed for this story acknowledged that the demand for low-cost policies has increased due to the surge in insurance costs in recent years.

Lockbert, CEO of Ormond Beach-based Security First Insurance, said part of the increase is likely to be the result of an increase in rental units. Another reason is that more homeowners are unable to get all paril coverage or are looking for a lower price, Bert said. Security First is one of the Florida-based insurance companies that offers residential/fire as an alternative to All-Paril homeowner coverage.

“We’ve definitely seen more homeowners choose to opt for (residential/fire) policies recently,” says Brian Murphy, owner of Murphy Agency, the Brightway insurance franchise at Palm Beach Gardens, “especially for investment properties or when trying to cut premium costs.”

Some insurance companies advertise residential/fire as an option

According to the data, housing/fire policies are considerably lower.

Residence/Fire policies vary by insurance company, and some companies advertise custom blend residential/fire policies to homeowners seeking affordable coverage.

The Boca Raton-based Florida Peninsula began sales in mid-2023, reporting 14,184 by the end of 2024. While the company’s website is designed to provide coverage for rental homes, vacation homes and investment property, “The housing/fire policy is also available to those living in homes looking for affordable, abundant roofs.”

Stacey Julianti, chief legal officer for the Florida Peninsula, says the insurance agent asked the company to add housing/fires to give it more flexibility. Sometimes businesses need to spread risks across different parts of the state, so providing traditional coverage in some areas is prohibited, but housing/fire coverage can be provided, he said.

Tampa-based American Integrity Insurance offers ValleGuard property insurance to homeowners that reads “meet the basic insurance needs of Valleda residents (to address the essential range of risks, such as fires and storms.”

The company reported an increase in housing/fire policies by 24,682 between September and December last year, state data shows. The company did not respond to Sun Sentinel’s request for further details on the increase.

Features advertised on the American Integrity website include more affordable premiums, core risk coverage and flexible coverage options.

Manatee Insurance Exchange added 32,413 housing/fire policies in the final quarter of 2024, but a company spokesperson said the figures reflect policies that Affiliate Company, SafePoint and Manatee were absorbed into participation in the state-run citizen property insurance company’s process.

Last year, there was an increase of 81,684 in the number of housing/fire policies, despite the fact that progressive insurance decided to stop selling or renewing them. ASI, a Florida subsidiary of Progressive, removed 56,303 residential/fire policies during the analysis period.

Agent: Don’t save that much, and ultimately it costs you

Coverage options provide homeowners with the ability to rely on insurance similar to all Paril’s coverage, says the agent. They warn clients to make wise choices and to be covered for what their paths may come.

That’s because of the big difference between housing/fire policies and traditional total disability policies, Bert says.

All-Peril Policy can reduce costs by packaging the various coverages homeowners want and taking away some of those coverages, he said.

When considering their options, homeowners must first determine the three types of residence/fire scope.

– DP-1: This is the most basic residential/fire policy that only provides actual cash value, or depreciation value, and is compensation for damages caused by several “named dangers” such as fires, lightning, and internal explosions.

– DP-2: Provide replacement costs or actual cash value compensation, adding additional risks such as wind, hail, vandalism, damages due to robbery.

– DP-3: Often referred to as “open perils,” these policies cover damage caused by theft and wind, as well as damage to residences and other structures such as garages and sheds.

It can often deal with additional aluminum construction, personal property theft, accidental water discharge, dog liability, computer equipment and other protections that are standard parts of many risk policies.

In addition to saving money, homeowners often choose housing/fire coverage if they are unable to qualify for traditional policies, Bert said. This can occur because their homes and roofs are too old, their homes may not meet the minimum value requirements of the insurance company, or they may have damaged their “insurance score” (similar to credit scores) by filing an excessive number of insurance claims previously.

Residence/Fires make sense for homeowners who cannot obtain traditional insurance but still have to comply with the requirements of mortgage lenders to maintain coverage, Bert said.

Mark Friedlander, senior director of media relations at the Industry Funded Insurance Information Institute, said that housing/fire policies meet mortgage lenders requirements if they cover mortgage balances or home replacement costs.

But just as consumers pay more at fast food restaurants if they try to build an all-peril policy by adding options to their home/fire coverage, agents say, just as they pay more than they normally would, if they try to build an all-peril policy by adding options to their home/fire coverage.

But choosing a lower coverage increases the risk that homeowners will need to reach into their pockets when it’s time to file a claim, said Brian Hodgers, president of Melbourne-based Full Selection Insurance.

A conscientious agent would carefully explain the risk to his clients, Hodgers said.

Otherwise, homeowners who choose homeowners/fire coverage based on low cost “maybe they don’t know they have lower coverage,” he said. “These clients are always lucky to chase cheap things, find a hard way, or bounce back from policy to policy every year.