Affordable Disaster Insurance an Essential Aspect of Home Ownership

While there are many reasons for the affordable housing crisis in Florida, one of them can be linked to the constant threat of natural disasters in the area. Hurricanes take a financial - and personal - toll.

As a result, the cost of homeownership can easily spiral out of reach for the average consumer during times of catastrophe if homeowner insurance isn’t made affordable, the National Association of Realtors said in written testimony to the House Subcommittee on Housing and Community Opportunity.

“Options for obtaining and maintaining coverage for natural disasters are dwindling,” said Thomas M. Stevens of Vienna, Va., president of NAR. “America’s hard-working families deserve a comprehensive federal natural disaster policy that makes natural disaster insurance available and affordable and reduces the circumstances under which insurance companies cancel these insurance policies.”

Recent research conducted by NAR in the state concluded that the lack of affordable or available homeowners’ insurance contributed to a slowdown in Florida housing markets, which can contribute to a slowdown in overall economic activity in the region. Florida home loan demand drives other factors.

“When buyers and sellers in high-risk states cannot obtain or retain homeowners insurance, which is necessary for a mortgage, it can slow home sales in those areas,” said Stevens. “A strong housing market is the foundation of a healthy economy, and as a nation, we must safeguard the vitality of the residential and commercial real estate markets.”

With Florida home loan rates consistently on the rise, potential owners need insurance to at least fall in their favor. Buyers will remain outside the market until factors allow them to make reasonable offers.