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New Insurance Rules May Affect Florida Home Sales

Insurance for homes built before 1982 now requires a 4 point inspection done by a Florida licensed inspector.

New rules from Citizens Insurance may affect the sale (or purchase) of your St Petersburg home.

Starting September 1, 2012, Citizens requires a 4-point inspection for any new or renewal of a homeowner’s insurance policy on a house 30 years or older – i.e., built before 1982, which covers the majority of homes.

The four “points” of the inspection are:

1.) plumbing,

2.) electrical,

3.) HVAC (heating and air conditioning)

4.) and the roof.  

The inspection must be completed by an appropriate Florida licensed inspector and photos must accompany the report.  

It appears that a new 4 point inspection report will need to be done with each annual renewal. In addition to a certification that all four systems are in good working order, there are some other requirements to note:  

  • all roofs will need to have at least 3 more years of expected life;
  • no polybutylene pipes;
  • and if the house has single strand (aluminum branch) wiring, separate documentation of remediation must be provided and certified by a licensed electrician.

Three remediation methods are allowed: 1) entire home rewired with copper; 2) connections repaired via COPALUM crimp; or 3) connections repaired via AlumiConn.

The aluminum wiring situation is similar to the knob-and-tubing situation in older homes. Most real estate sales contracts will state that all systems need to be operating properly but that the seller/owner will not have to upgrade to new codes unless an item needs repair.

However, if the contract is subject to financing, the lender is going to require insurance. If the buyer can’t get insurance for the home, the loan won’t be approved, so the financing clause will allow the buyer to walk away.

So, it’s better to address this issue before you put the home on the market.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Kim Morrissey October 07, 2012 at 02:44 AM
Insurance in this state is a joke. Citizens has stopped covering screen porches, carports, screen cages over pools, gazebos, etc. They have reduced liability coverage to $100,000 maximum with no option to buy more. They have reduced contents coverage & coverage for 'other structures', such as detached garages. You can purchase more, but only to a certain maximum which is not even enough to rebuild a 2-car garage. They require a 10% deductible for sinkhole coverage, and on and on. The latest news we got from our agent is that they also will no longer cover any room that is attached to your house if it has a "roof covering that differs from the roof covering of the main house". Basically, they are trying to take our money without covering anything at all. And it's not like we can shop around - no one else will insure us. Why aren't people up in arms about this? Why aren't they protesting? Why aren't they demanding action from the FL legislature to do something about the insurance situation in this state? A 4-point inspection at every renewal is ridiculous - all it will do is put money in the pockets of the inspectors. If you have an inspection when you purchase the property, not much is going to change in 1 year, unless you upgrade & then it's a change for the better, not worse. I'm so sick of the crap that Citizens dishes out, it's no wonder people without mortgages drop their insurance. I would too if I could pay off my mortgage.
cherylwithac October 09, 2012 at 02:28 PM
Last summer I almost bought a detached home (built in 1955) in St. Petersburg. It had been all rehabbed on the interior, but I wondered what was inside the walls (electrical, plumbing) that I couldn't see. In the end, I didn't buy the house, in large part due to my fear of what Citizens Insurance would cost me. Based on the latest news of annual 4-point inspections, my fear was more than justified. And "going naked?" (forgoing insurance by those who have their homes paid off)--what are those people going to to if and when the inevitable hurricane arrives? Live in a FEMA trailer, I guess. The Florida housing market is toast, and I don't foresee hoardes of people heading for the Sunshine State to retire or for some other reason as they did in the past. Florida's best days are way behind her.
Anne Hensel Realtor October 14, 2012 at 01:29 PM
The whole new insurance deal is a major rip off to say the least. As a realtor I can promise you that home owners that want to sell their property here in Pinellas County will not replace wiring, plumbing, roof and AC so the next owner can get a better insurance quote. These are expensive items to repair/replace and the sellers will never get the money back. So, end of the story, insurance quotes will go up and up, less people will be able to get a loan because of these increased costs and more existing home owners won't be able to make their mortgage payments because of increased insurance rates. BUT as always, the insurance companies are happy.
Deborah Weatherby October 16, 2012 at 07:42 PM
I agree about the insurance issue, but not with the " florida housing market is toast", truth be known and I was one who was devastated by the Florida real estate debacle. However, the subsequent recalculation of real estate prices has brought back the real estate market. Now people, especially in the baby boomer retirement phase of their lives can actually afford to buy real estate in Florida for the reason that Florida is a great place to live, not some place to play roulette in the real estate market. Great beaches, plenty to do, places to go, etc, the way Florida used to be.....and the downfall saved a great many beachside bars and restaurants that might have gone the way of the great condo development. But yeah, florida insurance is a pain and thats why we don't have any..no mortgage either, one half dozen or the other..
cherylwithac October 25, 2012 at 05:23 PM
The real estate market has not come back. There are very few properties on the market due to the boom years. The result is that people own more on their homes than they're worth or will ever be worth (in our lifetimes) and therefore can't or won't sell. How can people relocate to Florida when there's nothing to buy? And there's more to life than going to the beach.
cherylwithac October 25, 2012 at 05:27 PM
Besides, who wants to relocate to a state where they can't afford homeowner's insurance? It sounds like a rather crazy thing to do. Won't the "boomers" think about that part of the Florida real estate equation? And all of this chaos was caused by the real estate frenzy, when people were playing roulette in the real estate market.
Deborah Weatherby October 25, 2012 at 05:38 PM
I apologize, we live in Sarasota county and we have the lowest inventory of real estate since 1998 and only 15% are short sales or foreclosures. and you are right, we will probably never see the high prices that existed a few years ago and that hurts. However it does make Florida more attractive as homes are now more affordable, medium price in S'sota for homes is around 170K about the same for condos. Thats affordable. We made the same mistake thousands of others did and paid for it dearly with our savings, but one must always look forward.
cherylwithac October 25, 2012 at 11:58 PM
It seems to me that low inventory by definition equals low sales, hence fewer retirees moving into Florida--unless they want to rent a condo during their golden years. I said it before, and I'll say it again: the Florida Housing Frenzy has RUINED Florida for our lifetimes. The low inventory is a reflection (albeit indirectly) of the greed that reigned when properties went sky high. People can't or won't sell their homes in Florida anymore because they're underwater on them. There's nothing for "boomers" to buy.
MARY STOCKMAN January 05, 2013 at 12:20 PM
AND WHILE WE ARE ON THE SOBJECT OF HOMES IN FLORIDA--WHATS UP WITH THESE PROGRAMS THAT THE GOVERNMENT GAVE MONEY TO OUR COUNTY,HILLSBOUGH CO,PASCO CO,PINELLIS CO ETC.? TO HELP POOR PEOPLE BUY A HOME? I TOLD THEM MY SISTUATION, THEY TOLD ME TO ATTEND THE CLASS, WHICH I DID, EVERYTHING THEY TOLD ME TO DO,I AM TALKING ABOUT THE NSP AND THE USDA PROGRAMS,WHERE THE LOW INCOME FAMILIES CAN GET A PIECE OF THE AMERICAN DREAM BY OWNING A HOME? YEA RIGHT,I WORKED ON MY CREDIT FOR MONTHS AND NOW HAVE GOOD CREDIT,NOW THEY TELL ME I DONT MAKE ENOUGH MONEY ON SSDI,WHAT A RIP!!

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