While you are deciding how much home you can afford and where you want to live, here’s a consideration many do not initially think about: INSURA
NCE! Characteristics about the home you choose influence your homeowners insurance premiums. Age, condition and other factors like a home’s proximity to a fire station will all influence insurance premiums. According to the Insurance Information Institute (I.I.I.), a nonprofit communications organization supported by the insurance industry, a stately older home with older wiring, plumbing and ornate plaster details may be costly to insure.
Homeowners Insurance in Florida–Since about 2009, Floridians have relied on the Citizens Property Insurance Corporation, a governmental entity, to ensure the public has adequate insurance coverage available. Hurricane Andrew slammed South Florida on August 24, 1992 causing loss of life and $30-billion in property damage
. After Hurricane Andrew, private insurance carriers were increasingly unwilling or unable to provide affordable property insurance coverage in Florida to the extent sought and needed. The absence of affordable property insurance was a threat to public health, safety, welfare, not to mention the economy. After a moratorium on insurance companies cancelling policies, Citizens was created by the Florida legislature as the insurance company of last resort for Florida policyholders. According to its website, https://www.citizensfla.com/index.cfm
, Citizens has 1,439,898
policies in force as of March 31, 2012. Florida also enacted stricter building codes after Andrew and has created a catastrophe fund for insurers to tap for the next big disaster. There was no such cushion before Andrew. http://www.sptimes.com/2002/webspecials02/andrew/
In addition to considerations about the home itself, here are some basic questions everyone should ask their insurance professional before buying a homeowners insurance policy.
How much would it cost to rebuild this home in its current location in the event of a total loss? Your policy should cover the cost of building a new home from the ground up. Homeowners policies cover partial or total damages caused by fire, hurricane, hail, lightning or other disaster if listed in the policy. Floor and earthquake-related losses must be insured separately as they are excluded in standard homeowners insurance policies.
How much is my personal property worth in the event of a total loss? Most companies provide coverage to about 50 to 70 percent of the coverage for the home’s structure. (A $100,000 policy for the structure would have $50,000 to $70,000 worth of coverage for personal property.) Conduct a home inventory at https://www.knowyourstuff.org/iii/login.html).
How much liability protection do I need? Liability covers homeowners against lawsuits for bodily injury or property damages caused by other people, including pets. The liability portion of a policy pays your legal defense cost and any cour tawards – but only up to the limit set in the policy. It’s effective in the home and other places. Limits tend to start at about $100,000 and many insurance agents recommend at least $300,000. Depending on your assets, you may want more or less.
What level of additional living expense coverage do I need? The additional living expense (ALE) provision is found in standard homeowners policies. It pays your costs for living away from home while damage from insured disasters make your home uninhabitable. ALE covers hotel bills, means and other expenses above customary living expenses. This coverage differs from company to company. 20 percent of dwelling coverage is the average, i.e. for $100,000 in coverage you would have $20,000 for ALE. Some companies impose a time limitation of 12 to 24 months.
Should I buy separate flood and/or earthquake coverage? Flood insurance is purchased from the federal government’s National Flood Insurance Program and from a few private insurers. In Florida it’s a good idea to maintain flood insurance even if you are not in a flood prone zone because Florida is mostly flat. The cost of flood insurance coverage is based on how flood prone the home is. Earthquake coverage is usually available in the form of a supplemental policy.
Do I qualify for any discounts? Homes with smoke detectors, burglar alarms or dead-bolt locks often get a premium rate discount. Ask an insurance agent. Retired persons may qualify for a discount at some companies. Alarms that ring at monitoring stations often reduce premiums too. Citizens provides premium credits for construction techniques and features that will protect your home against damage caused by wind. The credits apply only to the wind portion of the policy premium and do not cover mobile homes. Homes that comply with the 2001 Florida Building Code can receive Citizens’ premium credits after the year of construction is verified