You need to look at your specific HO policy. Generally, water damage from leaking pikes, failed roof, etc are covered. Damage from floods is not.
Saying that the cost of HO insurance is rising faster than the national average doesn't capture all of the variables. Home prices in many parts of FL are rising faster than the national average, for example, making premiums go up to keep pace. A number of national insurance companies decided that FL was not a market they wished to be in and stopped doing business in the state (and thus allowing other companies to increase premiums at a faster rate in a less competitive market). And so on. Insurance is a bet that the company makes with you. If they think that they will lose, they will change the odds/cost. Generally speaking, they have to do all or none of a state...
Flood insurance is a special case among HO insurance. It is written by the federal govt because no insurance company wants to take on the risk. Because it is *only* flood insurance, it has to sustain itself from premiums. If you have several years of claims (and remember, it is *all floods* everywhere in the country), then premiums have to go up to keep it solvent.
Do you need it? Depends on how you feel about risk (and how your mortgage company feels about it.) You can go to Sumtergis.com and look at the latest 100 year flood plain calculations to see where you house sits. You may or may not think that hedging against an event which is likely (in other words has odds of happening) once in 100 years is significant.
Also keep in mind that we are a long way from the coast. Most flooding associated with hurricanes happens as a storm surge. If the storm surge makes it all the way to The Villages, the storm would be of truly biblical proportions and you'd be much too busy with other things to care about a little flooding.
Tornadoes are probably much more likely to be an issue here. You are welcome to worry about them, but then again, not many people move away from Oklahoma City, Memphis, or Kansas to escape them.
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