In my years of experience as an insurance claim attorney, I’ve often heard clients complain about their Florida homeowners insurance companies. Many of them have complaints about legitimate claims that were denied or underpaid. Others have complaints about the long, complicated process involved in filing a claim. Still others complain about the policies themselves and how difficult it is to understand them.
In this blog post I’m going to explain some of these difficulties, the thorny elements of policies such as limitations, exclusions, replacement cost versus actual cost, and assignment of benefits. These are all parts of insurance policies that people sometimes don’t totally understand but don’t question until they go to file a property damage claim.
At the time you’re filing a property damage claim or trying to understand a denied claim is not the best time to try to understand your Florida homeowners policy. In this blog post I’ll cover some of the elements that could be confusing, but I urge you to read your own policy, question your insurance agent, and call my office to get the answers you need. At Malik Law, we’ve helped hundreds of Florida property owners with their insurance claims and we want to help you.
Exclusions in Your Florida Homeowner Policy
Most insurance policies list damage-causing perils that are covered, such as wind and fire, and those that are not, such as flood and earthquake. The perils that are not covered are called exclusions and often listed in a separate section of the policy.
Since each plan is unique, I’m only going to discuss those exclusions that often lead to confusion and dissatisfaction:
Flood and Most Water Damage
Most policies do not cover damage caused by water that has been on the ground. This includes flood damage from water seeping into your home from the ground surrounding it to sewer system backup and sump pump overflow. Usually, you can add coverage for sewer system issues to your standard policy, but for flood insurance, you have to purchase a separate policy.
Most policies cover water damage caused by a burst pipe or malfunctioning appliance. However, if your insurance company determines the damage was preventable (e.g., you didn’t fix a leaking pipe), then they will most likely deny your water damage claim. In addition, most policies now exclude damage caused by water that was in your home for 14 or more days. This exclusion can be very ambiguous, so working with an experienced water damage claim attorney is recommended.
Mold damage is also often not covered by your homeowners insurance. Mold grows and spreads gradually, so insurance companies view it as a problem that can be prevented. Discrepancies occur, however, when storm damage leaves your home vulnerable to the elements and water gets into your home and causes mold growth. In cases such as these, an experienced storm damage attorney can help you sort through the issues and get the payment you deserve.
If damage occurs to your home, and your insurance company decides it could have been prevented had you maintained your home properly, repair and/or replacement costs will probably not be covered. This can occur, for example, in instances of damage from burst pipes; malfunctioning air conditioners, dishwashers, washing machines, dryers, and toilets; electrical wiring; and ceiling fans.
Problems with insurance claims often occur when homeowners disagree with their insurance company’s assessment of the damage as having been preventable. In Florida, this is especially common with roofs, when insurance companies refuse to pay for storm damage, saying that the roof needed repair work before the storm damage occurred. In cases such as these, it’s important to have an experienced storm damage attorney advocating for your rights.
The main points about exclusions are that you need to be vigilant in maintaining your property and in reading your policy carefully. Whenever your policy is updated, make sure you note all exclusions, question your agent if you do not understand something, and ask about additional coverage if the your present policy does not seem adequate.
Limits to Coverage in Your Homeowners Insurance Policy
In addition to excluding specific types of damage, standard insurance policies place limits on the amount payable for specific losses. Some of the most common limits are placed on:
Most homeowner policies limit the amount payable for luxury items such as expensive jewelry, furs, art work, antiques, and other collector’s items. These items can usually be insured with a separate policy or rider to your regular policy.
Your coverage for all of your personal possessions, not just luxury items, also has limits. If the items in your home exceed those limits, you may need to increase your coverage or obtain separate coverage.
Money and Important Documents
Insurance policies also limit the amount you can recover for stolen or damaged cash, bank notes, and gift cards. In addition, deeds, manuscripts, passports, tickets, and stamps may not be covered under a standard homeowners policy.
Watercraft and Trailers
Trailers not used for watercraft, as well as all watercraft, including their equipment and their trailers, are subject to strict limitations. Owners are generally advised to purchase separate policies for these expensive items or, if possible, add special coverage to their homeowners policy.
Sporting and Electronic Equipment
Many policyholders are unaware that coverage for their bicycles, sporting equipment, computers, gaming systems, and other electronic equipment may be limited. If these items are damaged by a covered event, they may not get enough to replace everything that was damaged.
Debris and Tree Removal
Most policies cover debris and tree removal if insured property is damaged, but there are usually limits on how much the insurance company will pay. Also, if a tree, large branch, or other debris lands in your yard but does not damage covered property, insurance companies will typically not pay for removal unless the entrance to your property is blocked.
Replacement Cost Versus Actual Cash Value
When reviewing your insurance policy, it’s important to understand the distinction between replacement cost and actual cost. If your home and/or your personal property are insured for replacement cost, then your insurance should cover the cost to replace damaged items, no matter how old they are.
If you do not maintain the appropriate amount of insurance, given inflation, you could, however, be penalized when filing a claim. Even if you have inflation guard that increases the value of your property automatically each year, you still need to assess your coverage to make sure it is sufficient to pay for real replacement costs.
Actual cash value coverage differs from replacement cost in that it pays for damaged, lost or stolen items at their actual value at the time they are lost or stolen. This means depreciation costs are deducted from the current value or actual replacement cost for damaged property. For furniture and major appliances, the difference between actual cash value and replacement value can be significant. For aging roofs and older windows, it is staggering.
Assignment of Benefits
Since July 1, 2019, in Florida, insurance companies have been able to offer policies that limit your right to assign your benefits to a contractor. These policies are generally cheaper than other policies, and therefore attractive to consumers. However, if your property is damaged, you will not be able to choose who does the repair or replacement work on your property. Only your insurance company can choose.
Problems can arise if contractors chosen by your insurance company do substandard work or install poor quality products. You have no recourse if you have a policy that restricts the assignment of benefits. If, on the other hand, you have an unrestricted policy, you will pay more for your insurance for the same coverage, but you will have some choice in determining who does repair work on your property and be able to pick contractors with a reputation for quality work.
Get Help with Your Florida Insurance Questions and Claims
Malik Law, PA is one of Florida’s leading insurance litigation law firms. We provide personalized, high quality legal representation for homeowners and injury victims seeking justice. We have helped our clients recover millions of dollars from insurance companies and want to help you obtain the payment you deserve.
If you have questions or concerns about your coverage or a property damage claim, please call our office, chat online with us, or submit the Free Case Evaluation form on our website.
Baillargeon, R. (2018). Report: Florida homeowners face insurance challenges as 2018 hurricane season begins.
The Florida Senate. (2019). Insurance assignment agreements.