Florida Homeowner’s Insurance Policy Basics

A homeowners insurance policy has one main purpose: securing your assets and making you whole after an insurable occurrence negatively affects your most valuable possession – your house. “Insurable occurrence” is defined in your policy and can include a fire, a storm, a falling tree and a burglary or vandalism but probably doesn’t include a flood.

If you are not familiar enough with your Florida homeowners insurance policy, you could be putting your house and assets in harm’s way.

The Basics of Dwelling Coverage

The insurance you have for your home covers the actual structure including any built-in appliances, wiring and plumbing. It also protects attached garages that share a foundation with your home but does not insure unattached structures like fences and sheds (these likely fall under “Other Structures” which are treated differently than the home itself). Be sure to ask your Florida insurance agent about coverage for these types of structures.

Your dwelling insurance could cover either replacement costs or actual cash value. While the difference between replacement cost and actual cash value may not seem like much, coverage for replacement costs is actually very different from actual cash value. Replacement costs require the insurer to compensate you the funds you actually need to buy a like item to replace the one that was missing, damaged or stolen. That means your claim could be equal to the total needed to restore your house or purchase one that is similar and in a similar location. Actual cash value, however, gives you the assessed property value regardless of whether or not it is sufficient to help you restore what you lost.

In today’s economy, the current assessed value of your property may be substantially different than what it would cost to rebuild and replace your home.

Personal Property Coverage-Your Home’s Contents

Possessions inside your house are protected under the Personal Property/Contents part of your policy.

This section covers all your furniture, clothing, electronics, jewelry, free standing appliances and other interior contents. The limit of coverage for your personal property must be believable when compared to your dwelling coverage and most insurers set ratio limits that limits your personal property coverage from surpassing a proportion of your dwelling ceiling.

Just like your dwelling coverage, your personal property coverage could provide replacement value or actual value which will subtract the lost, stolen or damaged property’s depreciation from the replacement value in order to determine the amount of the claim. Appraisals and purchase receipts for major items will be helpful in the event of a personal property claim.

Liability Coverage-Covers Others Accidental Injuries

It’s an unfortunate reality, but sometimes people in your home have accidents. They may fall over a loose walkway stone or trip on your deck, but if they are hurt and want to have their medical fees paid along with pain and suffering, your liability coverage is there to handle the claim.

Loss of Use Coverage-An Uninhabitable Home

If your house becomes uninhabitable due to fire or hurricane or other insurable occurrence, then you may not be able to live in it until renovations are done. If the loss is an insurable accident, loss of use coverage in your policy will compensate you for any living
expenses that you incur which are above your normal expenses while your home is not livable.

All of these coverages are subject to liability limits and paid premiums. For some coverage, you will also have a deductible.

Questions? Give us a call at 561-637-2424.