As Florida homeowners grapple with escalating home insurance premiums, many are turning to dwelling/fire insurance policies as a cost-saving alternative. While these policies offer lower premiums, industry experts warn that they come with significant risks and may not provide comprehensive coverage.
Dwelling/fire insurance policies, which typically cover specific perils like fire and windstorm, have seen a notable uptick in Florida. According to data from the Florida Office of Insurance Regulation, companies like American Integrity Insurance and Manatee Insurance Exchange have reported substantial increases in these policies. American Integrity added 24,682 dwelling/fire policies between September and December 2024, while Manatee Insurance Exchange added 32,413 policies during the same period. These increases are attributed to policy transfers and efforts to depopulate the state-run Citizens Property Insurance Corp. 
The appeal of dwelling/fire policies lies in their affordability. For homeowners facing annual premiums averaging $10,996—the highest in the nation—these policies offer a more budget-friendly option. However, experts caution that these policies often lack the comprehensive coverage of standard homeowners insurance, potentially leaving policyholders exposed to significant financial risks in the event of damage not covered by the policy. 
The surge in dwelling/fire policies comes amid a broader insurance crisis in Florida. Climate change has increased the frequency and severity of natural disasters, leading to higher claims and prompting insurers to raise premiums or exit the market altogether. A report by the First Street Foundation projects that home insurance premiums in Florida could rise by 89% over the next 30 years due to climate-related risks.  
In response to the insurance challenges, Florida lawmakers have implemented reforms aimed at stabilizing the market. These include measures to reduce litigation costs and encourage insurers to remain in the state. However, the effectiveness of these reforms remains to be seen, and homeowners are advised to thoroughly assess their insurance needs and consult with professionals before switching to dwelling/fire policies.
While dwelling/fire insurance may offer immediate financial relief, homeowners must weigh the potential long-term costs and coverage gaps. Ensuring adequate protection for one’s home requires careful consideration of the risks and benefits associated with different insurance options.
