Currently, the Florida Legislature is seeking ways to change the manner in which Florida homeowner insurance carriers are permitted to operate. In the past, large insurance companies, e.g., Allstate and State Farm, amongst others, were permitted to set up separate Florida subsidiaries named Allstate Floridian, State Farm Floridian, etc., and spread the casualty risk only among Florida homeowners. The legislature is seeking to change this operation so that the risk is spread amongst all the insurance companies' policyholders, instead of just Floridians. This may reduce the cost to Florida homeowners.
Coverages To Consider
Understanding the different types of coverage offered to homeowners, such as hurricane, windstorm, and flood policies differs in Florida. Up north you would most likely be automatically covered for wind damage from a tornado - not the case in Florida, so you need to ask the insurance carrier in depth questions about your coverage. Usually, wind insurance coverage must be bought separately and carries its own deductible.
"Note:" According to the Florida Statutes, insurers must give "reasonable discounts" for "mitigations or measures" to fortify your home against hurricanes. These discounts will vary by insurer. For more information, visit the following site: www.fldfs.com. Sometimes, getting a simple mitigation insurance inspection (costs beginning as low as $75) prior to taking out your new policy can save you hundreds of dollars on your insurance costs.
And, you may have already had "rising dirty water" coverage up north in your policy - again not the case in Florida - for that you need to purchase flood insurance. Look into pool Flood Insurance even if you're not in a Flood Hazard Zone. This is especially important in SW Florida. The cost is small in comparison to having a Hurricane claim turned down for water and not wind damages. Again, be sure to ask these questions! You can call 1-877-30-COVER to begin researching the costs for these Preferred Risk Pool Flood Policies.
Look for the best catastrophic insurance coverage...this means enough coverage to replace the dwelling and personal property, as well as living expenses while the home is being replaced. And, find a policy that offers "replacement value" coverage rather than "cash value coverage." This means your policy will replace an item such as a 3 year old TV, rather than paying you its current value. The insurance company will depreciate the item and you will receive what the worth is today versus receiving monies to replace the item. Further, there may be dollar limitations on claims. Many homeowners' policies will limit the amount paid for stolen or lost items without a rider to the policy and an appraisal of its value. Be sure to carry enough replacement cost to rebuild your home at today's dollar value. If you are insured for $180,000, but it will cost $250,000 to rebuild, then without replacement cost coverage, you will only receive $180,000 and the rest of the monies will have to come from your resources.
Be sure to understand your liability insurance coverage. Generally your homeowner's insurance covers you for accidents that happen to other people on your property, including medical care, court costs and awards by the court. However, there is usually an upper limit to the amount of coverage provided. Be sure that it's sufficient, especially if you have significant assets.
Condo owners...check out the provided coverage through the association's master policy and then be sure to get a separate "contents" coverage policy on your own.
Finally, see if there's a government-backed insurance plan. In some high-risk areas, such as coastal zones, federal or state governments may back plans to lower rates. So, be sure to ask your insurance agent.
For more information on this real estate topic, please feel free to contact us directly. Our associates will be more than happy to assist you in answering any and all questions you may have.
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Page Authored by Benjamin Dona of Gulf Coast Associates, Realtors
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