Insurance is something most people don’t want to think about until they need it most. But understanding what is and isn’t covered in your homeowners and renters insurance policy can mean the difference of being able to rebuild your home and replace your personal belongings.
If you experience any problems with a hurricane or catastrophic claim, please contact the Florida Department of Financial Services at 1-800-227-8676 (1-800-22-STORM).
Building code upgrade coverage
Building codes are updated periodically and may have changed significantly since your home was built. If your home is badly damaged, you may be required to rebuild your home to meet new building codes. That includes homes built before flood regulations which may require the home to be elevated. Many insurance companies offer an Ordinance or Law endorsement that pays a specified amount toward these additional costs.
Policy must be able to replace the home
You need enough insurance to cover the cost of rebuilding your home at current construction costs and building codes. Don’t include the cost of the land. Check the value of your insurance policy against rising local building cost each year. Advise your insurer and increase the limits of your policy if you make improvements or additions to your house.
Federal flood policy is necessary for coverage
Standard homeowner policies do not cover damage from floods, including storm surge from a hurricane. Insurance for flooding and storm surge is available from the National Flood Insurance Program. Information should be available through the agent handling your regular homeowner’s policy, but is also available from the National Flood Insurance Program or by calling 1-888-379-9531. Remember, there is a 30 day waiting period for flood insurance to go into effect. Don’t wait until a storm is threatening.
Be aware of your hurricane deductible
Even though the requirements have been in effect for 10 years, many Florida residents were caught unaware of their homeowner insurance deductible. Nearly 70 percent of homes in Florida have a special deductible for hurricane damage in the amount of 2 percent of the policy limits per event. For a $200,000 home, that is approximately $4000 per event. Homes valued at less than $100,000 may still have a $200 to $500 deductible. More expensive homes may have a 5 percent deductible. Talk with your agent to determine your potential out of pocket expense.
Most homeowner insurance policies provide coverage for your personal possessions in amounts approximating 50 to 70 percent of the amount of insurance you have on the main structure or “dwelling.” To determine if this is enough coverage, you need to conduct a home inventory and talk with your agent.
How are your possessions insured?
You can insure your possessions in two ways. You can either insure your belongings for their actual cash value or their replacement cost. A cash value policy pays the cost to replace your belongings minus depreciation. A replacement cost policy, on the other hand, reimburses you for the cost to replace the item.
Additional living expenses post disaster
This is a very important feature of a standard homeowner insurance policy. This pays the additional costs of temporarily living away from your home if you can’t live in it due to a hurricane, fire or other insured peril. It covers hotel bills, restaurant meals and other living expenses incurred while you are unable to inhabit your home. Flood insurance does not include additional living expense coverage, so this assistance will not be available when damages to a home occurred from flooding or storm surge. You will still be required to make your monthly mortgage payment even if your home is uninhabitable.