Typically, every Florida homeowner is aware of the difficulties presented when obtaining insurance for their most valuable asset: their home. Inland Florida counties do not have severe windstorm risks like coastal counties, but many parts of the state are prone to sinkholes that can destroy a dwelling overnight. Fortunately, the homeowner’s market in Florida has seen somewhat of a revival due to smaller insurers entering the market. Many of these new insurers enter the market by purchasing policies from the Citizens Insurance Corporation, Florida’s last-resort insurer. In most cases, new carriers will use these purchases to start a book of business that they can increase by later offering policies to the general marketplace.
Florida Homeowner’s Insurance
The Florida homeowner policy is similar to policies offered in other states; it is a package policy that offers several types of coverage.
- Dwelling – This coverage covers the dwelling (home) and anything attached to it.
- Other Structures – This coverage is for unattached structures such as gazebos, workshops, and unattached garages.
- Contents – Contents coverage covers any unattached property within the dwelling such as furniture, clothing and appliances that are not attached to your home. There are, however, certain items like jewelry, guns, art, and collections that have sub-limits (limits within the contents limit), which may require the homeowner to schedule them for additional coverage.
- Personal Liability – This provides coverage for the homeowner if they become liable for injuries or damage to a third party while in or on their property.
- Medical Payments – Medical payments coverage is similar to Personal Liability, but it is sold with lower limits and liability does not have to be established for the company to provide coverage.
- Loss of Use – Although misunderstood by many policyholders, Loss of Use coverage pays for expenses incurred while renting another premise to live in while their insured property is under repair for covered damage.
There is also coverage available by way of endorsement (add-ons) to most homeowner policies, such as that for furs, guns, and art collections. The homeowner can also purchase additional coverage for mold, water backup, sump overflow, and often even identity theft.
Coverage for wind damage is handled differently in Florida than many other states due to the constant risk of hurricanes. In the coastal areas surrounding the state, there is a designated area referred to as a “wind-pool.” For property owners living in a wind pool, coverage for wind damage is typically excluded from the homeowner’s policy and must be purchased separately from Citizens Property Insurance Corporation or other specialty insurance companies.
All Florida Homeowner’s insurance policies that provide windstorm coverage (for properties located further inland) have a separate deductible for wind damage. This separate deductible will typically start at one percent and can be as high as ten percent, depending on the homeowner’s preference. When a higher deductible is selected, the premium is reduced. These higher deductibles are also reflected in a wind-only policy provided by Citizens and other specialty companies. It is important to note that the deductible percentage on a wind policy represents a percentage of the dwelling coverage, not a percentage of the claim.
Always speak with a licensed agent or broker to determine your individual needs and the policy coverages you require.