Perhaps you are a snowbird buying your first place in Florida? You might be a native Floridian buying in a location that has different Wind or Flood exposures from what you are used to. In all of these scenarios and more, clients are surprised by the cost of the coverage and are seeking multiple proposals.
Below are a few pointers to help navigate the Florida Homeowners Insurance Marketplace.
● Carrier Rating – In most of the US, the standard rating for insurance carriers is AM Best & insurance agents across the nation are accustomed to presenting A rated products to their clients. Many (if not most) of the homeowners markets in Florida DO NOT maintain an AM Best A Rating. Be careful that the Carrier presented has the wherewithal to withstand a large scale claim.
● Valuation – Multiple carriers calculate their RCE (Replacement Cost Estimators) conservatively for them, not for you. Meaning, they assume a low cost per square foot, limiting the total amount of coverage they will pay out in a total loss. Be sure you understand how much you need & that you work with a broker who can advocate this to the carrier of choice.
● Replacement Cost on Contents – Many proposals boldy display Replacement Cost on the Dwelling and consumers are unaware that they need a separate endorsement added to get that coverage on their Contents. Be sure you have it, you don’t want to get paid for ⅓ of a couch if you have a loss.
● Proper Wind Mitigation Credits – The credits that can be applied can have a dramatic influence on the pricing. In virtually all cases, it is worth the investment of $75 to obtain the inspection and get your credits applied appropriately.
● Limited Water Damage – Most policies have pretty limited water damage coverage. There are a select few that cover it to the full policy limit. Make sure your limit is sufficient to meet your needs.
● Co-Insurance – Many policies include a co-insurance penalty. This is a clause that many people do not understand. It demands that you insure your home to a percentage of the replacement cost at the time of the loss. If you do not, a penalty is imposed on your claim. Typically, the penalty demands 80% of the Replacement Cost (at the time of the loss). However, because so many insureds do not understand this clause, they opt to select 100% the value or face a penalty. You do not want either if you can avoid it, Agreed Amount is much more preferable.
● Flood – Flood Insurance is specifically NOT COVERED on Homeowners policies. You need to buy a separate Flood policy. The factors that impact your rates are Flood Zone (proximity to water) & Elevation. If the home is positively elevated, the cost can be mitigated. Ask the Real Estate Agent (especially on older homes) if they have an elevation certificate. Proving a positive elevation in a high hazard flood zone can dramatically reduce your flood insurance expense.
There are other intricacies to placing Florida Homeowners. Ascertain you are dealing with someone ethical & knowledgeable you can steer you in the right direction for you risk tolerance.