Purchasing Homeowners Insurance

Purchasing Home Owners Insurance in Florida

Although homeowners insurance is not required under Florida law, it most likely will be required by your lender and some local governments may require liability coverage if you own pets and/or a swimming pool.

Basic homeowners insurance packages cover the structure or the main dwelling; other structures, such as sheds, garages or fences; personal property and the contents of the structure; and also expenses should you lose the use of the home.

The property portion of the policy covers damages caused by covered perils. It may cover damage to detached structures and it may cover a dependant’s belongings while they attend college; your agent can explain these coverages.

Additional Living Expense (ALE) coverage will pay some of the expenses incurred if damage to your home prevents you from living there. Normal expenses that are generally covered include: food, housing, transportation (for work and school), relocation and storage. Your agent can tell you exactly what is covered and under what circumstances. Make sure you keep accurate records and all receipts if property damage forces you to leave your home.

Personal liability coverage covers you in the event of a claim or lawsuit which is the result of bodily injury or damage to others (non-auto). It covers all family members who live in the home, but does not cover intentional damage or harm. Your agent can tell you about any exclusions to this coverage.

Your agent can also discuss whether you should purchase replacement cost coverage or actual cash value coverage. Replacement Cost is the actual, present day cost to actually replace or repair property. Actual Cash Value pays the depreciated amount to repair or replace property. If a 20-year roof is destroyed and is 15-years old it would only be covered for its depreciated value. An eight-year old sofa which originally cost $900 will be covered for much less than that amount. Your agent must offer you replacement cost coverage and can answer questions on these coverages. If you reject it, you must sign a form saying you reject it.

Your policy may include an inflation guard so that your policy limits keep pace with cost increases over the years. If it doesn’t, you are responsible for periodically updating your policy limits. Your agent must also offer you Ordinance and Law Exclusion coverage, or you must sign off if you reject it. This coverage covers a portion of cost increases to repair your home if local building codes require changes that increase the cost of repairing or replacing your property.

Ask your agent about mold and sinkhole coverage in your policy. Some companies exclude mold damage and require you to purchase differing levels of this coverage.

Your agent can also explain the deductible amounts in your policy and also the hurricane deductible. You will be responsible to pay these amounts in the event of a loss and the amount of the deductible will affect your premium (The higher the deductible the lower the premium).

If you rent a home, condominium or an apartment it is important to consider renters insurance. This coverage insures your household contents against most perils which your agent can detail. Condominium insurance covers property and many items that your association does not insure against. Your agent can describe these coverages.

Do not wait until the last minute to purchase insurance as companies will not provide coverage when a tropical storm or hurricane threatens the state. Also, consider purchasing flood insurance, as your policy likely will not cover losses caused by floods. Your agent can explain and provide this coverage through the Federal Flood Insurance Program. Again, do not wait until the last minute as there is a 30-day waiting period for this coverage.

Finding an insurance agent who is a member of the Florida Association of Insurance and Financial Advisors is very easy. Click here to find one in your area:http://www.naifa.org/consumer/advisor.cfm