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.

1. Your mortgage and home and contents insurance – If, like the majority of home buyers, you have had to take a mortgage out in order to pay for your home then it is likely that your lender will stipulate that you have to take home and contents insurance or else forfeit the mortgage. They can legally do this because they are technically protecting their investment. Your home insurance company may even be linked to your mortgage lender.
2. Fraud – If you defraud your home insurance company by falsely claiming on your home and contents insurance then you are liable to be prosecuted. False claims cost home insurance companies millions of dollars every year and thus they are beginning to crack down on any false claims and are likely to push for legal action to be taken against you.
3. Applications for home and contents insurance – The one thing you must always remember from the start is to answer all questions that your home insurance company asks you completely honestly. Many homeowners have lied on their applications in the past and have later had their insurance revoked as a result. Again, this is a form of fraud, but has more serious implications for you than simply jail time. If your house is burgled, for example, and the home insurance company comes out to inspect the damage then they will discover that you don’t have the deadbolts on the doors that you claimed to have. You will forfeit any pay out and may just face prosecutions, thus causing you to lose your property and possessions as well as your freedom. That may sound a bit extreme, but you can see the trouble that one lie can get you into with home and contents insurance. So telling the truth may raise your premiums slightly, but they may work out far better in the long run.

Of course, this list is not an exhaustive list of the laws and regulations associated with home and contents insurance. Your home insurance company will be able to fully inform you of the all the laws that actually apply to you. However, they are the basic laws you should know before applying for home and contents insurance. The law may only actually come into question for you if you lie. If you remain honest then you will get along just fine.

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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.

First, there is the premium which is the amount of money that you will pay monthly or at another time interval. An installment fee will be added if you choose anything other than the annual payment.

Then there is your deductible. If you have a covered claim your deductible is the amount of money that that you will be responsible for before the insurance company begins to pay the claim. The higher the deductible, the less you would have to pay for your premiums. Note that you should choose an affordable deductible because t is the money that you will have to pay at the time of claim.

Now lets discuss what is not covered by your homeowners’ insurance. And this is the damage caused by floods and ground seepage. A separate policy is needed for flood insurance. This coverage is only provided at actual cost value and will not pay to rebuild your home. New Orleans is the perfect example for the need for flood insurance. A homeowners policy does not pay for damages caused by flood waters.

Yes, insurance can be very expensive but there are certain steps that you can take to lower your costs down. Here are some of the discounts that consumers should look into. Most insurance companies provide a multiple insurance discount. If you buy both your home owners and your auto insurance from the same carrier, the discount could be as high as 15 percent on your premiums.

For getting an alarm system or other anti theft devices your insurance company will provide a discount. If your house is monitored by security cameras, the discount will be even larger.

Also, maintaining a good credit score is another way you can save money on your home owners insurance. Many home insurance companies believe credit is an indicator of future potential loss and it is up to you to check your credit report for inaccuracies and to keep up with your payments in a timely manner.

A clue report is something else which you would want to look into. The insurance industry maintains a claims history database called the comprehensive loss underwriting exchange. Companies use this data to help gauge the insurance risk of potential clients. If a home has extensive claims or water damage then you may want to keep looking especially online at other homes or providers because you could be paying too much to insure your new home.

Basically, the concept of house insurance is of two different criteria. One is abut insurance for home and another is insurance for household objects, the other valuable things of the house. However, not all the same insurance, making it difficult for home owners to decide which insurance company will be better and cheaper for him.

The owner must take special precautions and that the investigation has been completed before deciding on the insurance carried out by them. There are steps which available, the premium will be that owners should pay much less than what he paid in a different way.

Insurance provided by most of the house to ensure that they are not always in financial losses and must bear the grunts. The owner must try to create a domestic policy that they are very low premium; come to the house can enjoy them only if they are risks associated with it.

With such means should try to avoid the risks associated with their homes, to reduce the risk for their insurance. The owner must ensure that safety requirements from the insurance company. They must be in accordance with the lock and deadlocks on all doors and windows, set the environment watch patrols, and ensure that they fix theft alarms by recognized fitters. If the owner of the house, a few steps to his house, then they can be a premium on ideas and their profits.

But before you with the help of safety equipment, means must ask whether the insurance will be in line with steps already taken to the home of their homes.

Homeowners, the house owners should also try to find the different home insurance company for the home insurance and the contents of the house. Because, sometimes the low cost of construction makes the difference for the payment of the insurance, they charge a high price for the contents of the house. It will be useful for home owners to view and search the various insurance companies, because they must make goals for the cheapest furniture and insurance costs.

What is more, the householders had better themselves lookout for cheap insurance policies instead of depending on the money loaners to provide them a scheme. They ought themselves directly go and have a talk with the insurance company or preferably research in the web, which is really cost effective and as well as jolly fasting. Furthermore, householders can avail a discount up to 25% if they register online.