The Two Types of Florida Homeowner’s Insurance

The standard Florida homeowner’s insurance policy is comprised of two sections. The first section pertains to the coverage you carry on your property, both your home and your other possessions. The second section relates to your personal liability coverage, which protects you in the event that a person or their property should be harmed through fault of yourself, your family, your pets or your property. Both types of insurance, personal property and liability, are of the utmost importance to Florida homeowners.

Replacement Cost vs. Actual Cash Value

Your Florida homeowner’s insurance may be payable based on either the replacement cost or the actual cash value of the property. If your policy stipulates payment of the replacement cost, then if your property becomes damaged or destroyed then your insurance will pay to have that property replaced with new property of comparable quality and type at its current market price. However, if your personal property coverage only provides for payment of the actual cash value, then you will only receive payment for the depreciated cash value of the property, which may not be enough to actually replace it.

Since all property depreciates over time, it is important to consider this distinction when selecting your coverage. Actual cash value coverage is generally less expensive and is a good option for those with easily replaced property, or those who feel confident in their ability to make up the difference in cost when replacing their property. For those who want to make sure they will be able to replace all of their property quickly, without a lot of out-of-pocket expense, then opting for the higher premium replacement cost coverage is the wiser investment.

All Risks vs. Named Perils

Another consideration is the distinction between all risks coverage and named perils coverage. Covering yourself with an all risks policy ensures that your home and other property are covered in any event. On the other hand, named perils policies provide the Florida homeowner with coverage from damage by only those events specifically named in the policy.

Named peril homeowner’s insurance policies commonly cover windstorms, hail, fire and theft and are usually less expensive than all risk policies. Named risks homeowner’s insurance policies leave you less protected than all risks policies. If you want to make sure that you and your home are protected whatever may come, then getting an all risk policy is the smart move.

Personal Liability Coverage

There is less variety in personal liability coverage for Florida homeowners than there is with personal property insurance. Most Florida personal liability insurance policies differ only in the amount of coverage and in the deductible. Choosing a lower limit leaves you more at risk should you be sued for damage to a person or property. It is wise to choose a higher limit (at least equal to the amount of liability coverage you carry on your auto insurance policy). Choosing a lower deductible will raise your rates, but leave you with less out-of-pocket expense in the event of an accident where you are required to pay damages or cover medical expenses.

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Fact: Standard home insurance does NOT cover damage caused by a flood. If you feel that you need coverage for a flood you should purchase a separate flood insurance policy.

Myth #2: The Medical Payment portion of my homeowners insurance will cover injuries to me and my family.

Fact: MedPay, a common feature of standard home insurance policies, is there to protect you in the event that someone other than you or your family (a neighbor, friend, etc) gets hurt on your property and they do not want to sue you. MedPay will typically cover up to $1,000 for each covered claim to someone outside of your family. If you or your family, however, gets hurt on your property they are not covered by your home insurance policy.

Myth #3: If my home is ever lost, my insurance company will reimburse me for whatever I tell them I owned at the time of loss.

Fact: In the event of a covered loss your home insurance company will ask you to make a list of everything you own and include specific details such as purchase price, date of purchase, serial numbers, etc. (Imagine trying to do this from memory!) The best way to avoid this situation is to have a home inventory already put together. Use a checklist like this one: http://homeinsurance.com home insurance home inventory checklist. Make sure to include photos, receipts, serial numbers and anything else that will help you prove ownership. Don’t risk not having everything replaced in the event of a disaster. Make sure to keep your inventory in a fire proof safe or at a friend’s house so it is still around when you need it!

Myth #4: If I file a home insurance claim, my home insurance premium will definitely go up.

Fact: While many home insurance companies do look at your claims history, there are many other factors that determine how much you will pay for home insurance. Filing one claim over a period of a few years might not increase your home insurance premium. To be on the safe side, always think twice before filing a claim for minor damages to your home. Consider your deductible. If the total cost of repair is not too much more than your deductible you might want to consider paying for the repairs yourself. While this might cost you more upfront, it might save you from an increased premium. If, because of a stroke of bad luck, you have to file multiple claims over a period of a few years and your premium is steadily increasing, rest assured there are other ways to save on your home insurance. Ask your agent about home insurance discounts. Sometimes simply installing a smoke alarm, burglar alarm system or by adding your auto policy to your home policy, you can save a great deal of cash.

Myth # 5 All of my valuables- like jewelry -will be covered in the event of a burglary.

Fact: There are limits on the amount of coverage you can receive for valuable such as jewelry, furs, etc. For example, most companies put a cap of $1500 on total jewelry lost during a burglary of your home. If you find that your jewelry values over $1500 you should talk to a home insurance agent and schedule an endorsement on your policy giving you additional coverage.

Myth # 6: My home insurance covers mold and/or other issues related to lack of maintenance.

Fact: Actually, a standard home insurance policy does not cover issues related to a lack of maintenance. For example if a plumbing leak that was left unfixed caused mold to grown in the interior walls of your home- mold removal and remediation would NOT be covered in your home insurance. Remember that your home insurance only protects you from damage caused by covered perils such as wind, hail, lightening, fire and theft. Keeping your home well maintained and safe for others is your responsibility and your home insurance company will decline coverage for maintenance related claims.

Myth #7: Flood Insurance is only for people who live in a flood zone.

Fact: Lending institutions, such as the bank that holds your mortgage, will require you to obtain flood insurance if you live in a major Flood Zone. However, keep in mind that all homes are at the risk for flood and standard home insurance policies do NOT cover flood related damage to your home. Due to the recent flooding in the Midwest the importance of this type of coverage for homeowners outside of a major flood zone has become even more apparent. If your home is flooded and you do not have flood insurance you will be on your own to replace your home and its contents. Flood insurance is a wise idea for every homeowner.

Myth #8: I will have to skimp on my coverage in order to save money on my home insurance.

Fact: Saving on your home insurance does not mean that you have to give up important parts of your coverage. It is very important to always be adequately insured in the event of a loss. However, there are lots of ways that you can save money on your home insurance that do not involve changing your coverage. Home Insurance discounts are available for homeowners who use burglar alarms, smoke alarms, deadbolts and other protective devices. Want more savings? Ask your agent about combining your home insurance and your auto insurance policies- you can usually save up to 15% this way.

Myth #9: When determining my coverage, I should use the purchase price for my house as my dwelling coverage amount.

Fact: A common mistake when homeowners are getting quotes for their home insurance is that they use the purchase price of their home to determine their dwelling coverage. Yet, the purchase price of your home includes the land under your home- which does not need to be replaced in the event of a fire or other peril to your home. For this reason, your dwelling coverage should always reflect the replacement cost of your home- or how much it would cost to rebuild your home in the event of a total loss. To determine this amount, multiple the sq. footage of your home by local construction costs. You can use a http://homeinsurance.com/calculators/ home insurance calculator to help you determine the amount if necessary.

Myth #10: You can not buy a home without purchasing homeowners insurance.

Fact: This is a tricky one. Because while you actually CAN buy a home without home insurance (a lender may not require it or you may, although rare, pay cash for the home) you should still always have home insurance on any property you own. Whether a lender requires it or not, the risk is always there. It would only take one fire or lightening storm to destroy your home and leave you uncovered.

When shopping for home insurance quotes, there is a lot more to consider than how much your coverage will cost. It is important to buy the right type of policy from a solid home insurance company. Make sure you choose the proper level of protection that includes special provisions for valuables such as jewelry, computers and other valuables. Also, depending on where your home is located, you may need to include coverage for floods or earthquakes.

As soon as you start shopping for home insurance quotes for your home in South Carolina, it is important to research your policy and understand what you are getting with that policy. Homeowners insurance is designed to protect South Carolina home owners against certain hazards. Normally there is a deductible that will need to be met when you file a home insurance claim unless otherwise noted. Homeowner’s insurance policies are determined by the potential dangers to your home and it is important to understand what is covered in your home insurance policy.

How Much Home Insurance do you Need?

Many home insurance companies use a cost estimator to figure home insurance quotes. This will ensure that your home is insured for the right amount. Home insurance companies do not insure dirt, so if you purchase a home on a large lot, do not be discouraged when your home insurance policy is a lot less than what you paid for the home. You are buying coverage for the home and not the land.

Home Insurance Rates

Your home insurance deductible is the amount you pay for covered damage before your insurance begins coverage. You can choose a higher deductible in order to lower your home insurance rates and premiums as long as you are comfortable with the added risk. Ask your home insurance company to give you home insurance quotes for a range of deductibles to see how much you could save on your premiums.

Determine Your Insurability

Your home insurance company will need extensive information form you to provide you home insurance quotes and be able to give you the best home insurance rates for your policy. To determine insurability, your home insurance company could ask:

When was your home built?
How old is the plumbing and electrical?
What type of roof is on your home?
What is the square footage of your home?
How many claims have you filed over the last 5 years?
Where is the home located?

If your home is located in a rural area without a nearby fire department or no near fire hydrant then the home insurance company may refuse to insure it. If this happens to you, contact a specialty or surplus-line company, but remember that this home insurance quote will take longer to obtain.

How to Lower your Home Insurance Rates

The more secure your home is the lower your home insurance rates can be. It is recommended to install security alarms and deadbolt locks on all exterior doors and secure locks on all windows. Once you have a security alarm installed, be sure to sign-up for a home monitoring service that will constantly monitor your home and send the needed help in the event of an emergency. Having a monitoring service can dramatically lower your home insurance rates.

Another great way to lower your home insurance rates is inquire about insuring other policies with your home insurance company. For example, if you insure your vehicles, motorcycle, boat, health insurance, etc., you could qualify for a discount for having multiple policies with the same insurance company.

Home Insurance Coverage

Home insurance companies and lending institutions normally require mortgage customers to purchase homeowners insurance. Do not depend on the coverage levels required by your mortgage lender. Those mandated levels are designed to protect the home itself, but not always your possessions. That’s why it is important to check with your home insurance company when shopping for home insurance quotes and rates to ensure that you have adequate coverage.

How to Save Money

There are easy ways to save money on your home insurance rates.

Shop around – searching of for home insurance quotes online is a great way to compare policies. Some websites enable you to fill out one form and you can receive multiple homeowners insurance quotes from submitting one form.
Raise your deductibles – the higher your deductible normally means the lower your monthly premiums will be.
Keep your credit report clean – many home owner’s insurance companies will base your insurance quote on your credit report rating. Higher credit scores could net lower home owner premiums.
Stay with the same insurance company – some home insurance companies will offer their customers special discounts for being a long-term policy holder.
Use one company for all of your insurance needs – you can receive deep discounts for using the same insurance company for multiple insurance policies. For example, if you use the same company for home and auto insurance you could qualify for a discount.
Don’t smoke – non-smokers could obtain lower home insurance rates because a percentage of house fires are caused from cigarettes.
Install a home security system – having a home security system could qualify you for a discount on your home owner’s insurance policy. Homes with security systems are less likely to become burglarized.
Ask for discounts – be sure to ask your insurance agent if there are any discounts you could qualify for.
Review your policy annually – your home insurance needs could change over time and it is important to review your policy regularly. Sometimes you may not need as much coverage and that could cause your premiums to go down.

Shop Around

Get home insurance quotes from several home insurance companies when shopping for home owners insurance. Remember, the lowest home insurance rate or quote does not always equal the best deal. Be sure to compare the coverage each home owners insurance policy offers, also, be sure to investigate that the home insurance company you are interested in has a good reputation in the industry.

Every home insurance quote could be different from each home insurance company, even from the same company. That’s why it is important for you to get several home insurance quotes before you make a decision. It is a good idea to go with a home insurance company that allows you to have the same home insurance rate forever, so you do not have to worry about your home insurance rates increasing.

An easy way to get several home insurance quotes fast is to jump online and browse different home insurance company websites. These home insurance companies have user friendly websites and include free quote systems that normally take about five to ten minutes to complete and often times you can compare several companies’ home insurance quotes.

In addition to obtaining several home insurance quotes quickly, you can educate yourself regarding the many different types of homeowners insurance policies out there and how much the home insurance rates should cost.

Basic Insurance

What do you think your basic home insurance policy covers? Everything that could possibly happen to your home? Not quite. While many of the things you would expect to be covered by your homeowners insurance, like fire or theft damage, will be covered by the policy, there are other things you may think would be covered that aren’t.

Windstorm Insurance

Many people who live in hurricane prone areas think their typical homeowners insurance will cover the price of repairing their home if they are the victim of a hurricane. However, many of the insurance companies that serve these areas insist that you have additional windstorm damage tacked on if you want to be covered for a hurricane.

Flood Insurance

What if your home were to flood? Think your regular home insurance will cover it? Not if you don’t have flood insurance. Flood insurance is almost always an additional coverage you have to tack on to your basic insurance policy. Even if you think your home is built high enough that it will not flood, consider what would happen if sewage was to back up into your home or rain poured in and damaged your home after a storm. Without flood insurance, you would be out of luck.

Earthquake

Do you live in an area where there are a lot of earthquakes? You want to make sure you have earthquake insurance to pay for any damage done to your home in the case of this type of natural disaster. Many insurance policies include earthquake damage, but not all of them. You should always double check if you live in an area that is prone to quakes.

The most important thing to keep in mind when you are purchasing homeowners insurance is that it is something that you need to make sure is done right before a disaster strikes. Otherwise, you may find yourself with a lot of damage to your home and without the money to repair your home and reclaim your life.