As 2019 draws to a close, many of us review the year’s events, as well as our personal accomplishments, things we still want or need to do before 2020, and the things we just won’t get to this year but plan on getting to next year. However, before we close out this year and make resolutions for the new year, I want to suggest adding a review of your Florida homeowner’s insurance policy to your year-end check list.
I know reviewing your homeowner’s policy isn’t exciting, but as an attorney who handles a multitude of insurance claim cases, I know it will be well worth your time. Too many Florida homeowners are disappointed and dismayed when their property is damaged and they discover their insurance does not cover the repair or replacement costs. After damage occurs is too late to change your policy, so now, before the year ends (or as soon as possible), please take the time to ensure you have the right kind(s) of insurance and enough coverage.
Do You Have the Right Insurance to Protect Your Florida Property?
Perhaps when you purchased your Florida homeowners’ insurance, you shopped around for the lowest annual premium. Looking for ways to cut costs makes sense; however, when it comes to property insurance, going cheap can be a mistake.
One area of particular concern in Florida is assignment of benefits. Since summer of this year, insurance companies have been allowed to offer policies that restrict homeowners’ right to execute an assignment of benefit. These policies are cheaper than other policies, but if your property is damaged, you cannot choose who does the repair or replacement work on your property; your insurance company makes the choice for you.
For some homeowners, this might be OK. Saving money on your policy is more important than being able to choose who makes repairs on your property when it is damaged by a covered peril. However, for those who want to make sure repairs are made by trusted contractors, a different type of policy may be more reasonable. Just keep in mind that once any damage occurs, it’s too late to change your policy.
Do You Need Flood Insurance?
Another area of concern for Florida homeowners is flooding. Typical homeowners’ policies do not cover damage from water that has been on the ground. This includes water from a pond, lake, or other body of water that floods your home; water that seeps into your home during or after a storm; or water from a sewer backup.
To insure your home for these calamities, you need an additional flood insurance policy and/or specific provisions added to your standard policy. The National Flood Insurance Program offers standard flood insurance with separate coverage for buildings and their contents to those who live in communities that participate in the National Flood Insurance Program. Also, if your home is in a lower risk zone, you may qualify for a lower-cost Preferred Risk Policy.
Homeowners can also apply for private market flood insurance, including:
- Standard Flood Insurance, which provides the same coverage as the standard flood insurance policy under the National Flood Insurance Program.
- Preferred Flood Insurance, which provides the same coverage as provided under the standard flood insurance policy but also includes losses from water entering the home that are not included in standard flood policies as well as coverage for additional living expenses,
- Customized Flood Insurance, whichincludes broader, customizable coverage.
- Flexible Flood Insurance,which covers losses from flood and may also include coverage for other types of damage from water originating outside the structure, as well as other provisions.
- Supplemental Flood Insurance, which provides coverage to supplement an NFIP or other flood insurance policy.
Do You Have Enough Coverage?
Florida homeowners’ insurance policies can be very expensive and very confusing. However, it’s important to make sure you have enough coverage in case your property is seriously damaged. For example, you should consider these important variables:
- The Value of Your Property – Perhaps when you originally got your insurance policy, your home was valued at $300,000. However, since that time, it has increased in value by approximately $200,000. You should increase your coverage to take the increase in value into consideration. Also, if you have expensive items that are not covered adequately by your standard policy, you should consider adding endorsements for them to your policy.
- Actual Cash Value v. Replacement Cost – Some homeowners opt for policies that pay actual cash value (i.e., actual dollar value of lost or damaged items in their depreciated, but undamaged, state) rather than replacement cost. If your home is damaged by wind, water, fire, or a storm, you may regret only receiving actual cash value and not being able to afford replacing items in your home.
- Deductible – Usually, if you have a higher deductible (the amount of money you have to pay out-of-pocket toward damages before your insurance company pays anything), your premium for the policy will be less. Before deciding to stay with a high deductible, however, you should consider if you will be able to afford it if your property is damaged.
- Liability – Most homeowners’ insurance policies provide a minimum of $100,000 worth of liability insurance. However, if someone is injured on your property or because of your pets, you may need more coverage to protect your assets. Usually, having at least $300,000 to $500,000 in liability coverage is recommended. If you have property and/or investments that are worth more than these limits of liability, you should consider getting umbrella coverage. Offered as a separate policy, umbrella coverage is a safety net that will pay on losses after you’ve reached the limits of your basic policy.
Reviewing your homeowners’ insurance policy may not be very exciting, but doing so can save you a lot of heartache and stress down the road. You never know when a calamity may occur and being prepared with sufficient coverage in case your property is damaged can go a long way in alleviating financial and emotional stress during crises.
If you have concerns about or problems with an insurance claim, please don’t hesitate to contact the experienced Florida insurance claim attorneys at Malik Law at 407-500-1000 or by submitting the Free Case Evaluation form on our website. At Malik Law, we’ve established a reputation for preeminence in helping clients throughout Florida obtain what is rightfully theirs from their insurance companies.