When disaster strikes, your Florida homeowners insurance policy can be your greatest asset. Homeowners insurance can protect you from bearing the full cost of repairs in the aftermath of a weather event, provide for swift remediation in case of water damage, and set you back on the path to wholeness after a burglary or fire.
However, there are many misconceptions about homeowners insurance. Three myths in particular often cause homeowners to be taken by surprise in their hour of need.
Flood Damage is not Automatically Covered
Homeowners insurance policies in Florida do not include flood damage. Separate coverage must be obtained to protect you from damages caused by flooding. If you live in a high-risk or moderate-risk flood zone, your mortgage holder may require that you add flood coverage.
If you live in a low-risk zone, you may wish to add flood coverage in any case, as the damage done by even a chance storm can prove catastrophic to your home. Check Florida flood zone maps and discuss the need for flood insurance with your agent. They can let you know where to purchase your flood insurance policy.
There is no Need for a Detailed Home Inventory
Some homeowners see the total maximum dollar amount covered in case of personal property loss, and assume there is no need for a home inventory. However, your insurance carrier may ask for proof of ownership in case of a claim.
The Florida Department of Financial Services recommends doing a room by room home inventory for insurance purposes, and provides a helpful worksheet and tips for creating a comprehensive list of all valuables. If you own luxury items that are worth more than the coverage provided by a standard policy, you can purchase additional scheduled personal property insurance to increase your protection.
The Current Market Value of the Home Determines Premiums
Homeowners insurance should never be tied to the actual cash value of the property, but instead, to the replacement cost value. For homes built years ago, the cost of today’s materials and labor to rebuild could easily outstrip the market value of the home. In contrast, luxury properties in highly coveted neighborhoods or on the waterfront could have inflated worth due to their location; the cost to rebuild the house could be far less than the estimated market value of the property.
By ensuring that your insurance policy is calculated using the replacement cost value, you can avoid paying high premiums for a property whose worth is primarily in the land underneath the home, and also protect yourself from coming up short if you have to rebuild a home that would cost more to replace than to buy on the open market. Your premium is based on a range of factors, and your home’s replacement cost value is only one of many.
By dispelling these misconceptions about homeowners insurance and what it covers, you can make more informed choices about your own policy, and better protect your home and belongings from loss
This article is for informational purposes only and does not form a part of, replace, change or amend any terms, conditions, provisions or language within your Olympus Insurance policy. We encourage you to read your entire policy.