Homeowners Insurance- Choosing a coverage amount

The major decision in choosing a coverage amount is to make your own, or to rely on a broker. If you choose to rely on the broker’s recommendation, you will usually want to choose their recommended coverage limit or limit of first dollar insurance. This ensures that the property has enough coverage for any damage caused by an unexpected event. However, choosing your own limits could potentially save money if there is no damage from an unexpected event because you only have more coverage than necessary!

If you plan on becoming a homeowner soon, this blog post can help guide your decision of what type of insurance policy would be best for your home and family in case something goes wrong.

If you haven’t heard of the term “cop-on”, chances are you or someone in your family has probably been in a car accident before. When you have a personal injury claim, the insurance company will want to know exactly what happened. If it was a fault on your part, you may be charged for the damages. This is called an “underinsured motorist claim” and it can be very expensive if not handled properly!

The Florida Underinsured Motorist (UM) Coverage is required by law in Florida and is designed to cover reasonable damages caused by an underinsured motorist, per Florida Statute § 527.944(3)(a)-(d). The law requires a UM limit of $10,000 per person, $20,000 per accident and $10,000 for property damage. However, it is recommended to have coverage in excess of the mandatory UM limit.

Take this example: John is driving his wife Sarah on the interstate when they are both involved in a car accident with an uninsured motorist. The other driver was at fault and has no insurance to cover their damages. Thankfully John had UM coverage, but his policy only had a limit of $5,000 per person and $10,000 total for both people involved. Unfortunately, John was responsible for the accident and had no health insurance, thus he had a combined medical bill of $65,000!

It is important to remember that UM insurance is not to replace your car or other property damage claims. You are only allowed to use it as a way to pay back medical bills for an accident. So it is important to know how much you want your limit of UM coverage before purchasing the policy. It could be $5,000 per person or more if you have more than one person in your car.

The method used to calculate the UM claim is based on the Florida Statute § 527.944(3)(a)-(d) and accepts certain criteria as proof of an injury. Those included are:

o A doctor’s statement indicating cause of injury;

o A police report that depicts or describes the automobile accident; or

o Proof of medical treatment for symptoms associated with an automobile accident, including, but not limited to, medical records or bills from a physician, hospital, or emergency room.

In addition to personal liability coverage and UM coverage, you should also have homeowners insurance as it pays for your damages in case of theft or other loss.

In order to make the right decision about what homeowners insurance is for you, you first need to understand what each coverage does. First, having a homeowners insurance policy provides protection against damage to your property that occurs as a result of:

‍Fire or lightning; windstorm or hail; explosion; Riot or civil commotion; Aircraft; Vehicles not owned by you if your liability insurance fails to pay because of bankruptcy. Act of God, which means any cause beyond your reasonable control. This includes failure of the sewer system due to weather or something someone else may have done that could have caused harm.

Please be aware that Act of God is an extremely broad term and should be used with caution. We’ll explain more about this later.

Most homeowners insurance policies, though not required by law, will cover your personal property, including your valuables. This may be furniture, electronics, tools and other items that you use on a daily basis. You should also have additional protection for things such as jewelry and money if you keep them in your home for security purposes. Keep in mind that many lenders will require you to have some form of homeowners insurance coverage on all of your properties if they are financed through a bank or mortgage company.

A homeowners insurance policy will also cover additional structures besides your primary residence. These could be a swimming pool, tennis court, detached garage or storage shed. However, if you don’t have a mortgage on these properties, they are considered “non-owner occupied additions” and will fall under different regulations with regards to coverage.

One of the most important things to consider is whether you would like to have replacement cost coverage or cash value coverage. Replacement cost coverage insures you for the full value of the property damage at its current market cost with today’s prices. Cash value covers what the building is worth at the time of loss minus what it would cost to repair it because of depreciation over time.

Replacement cost is better for items that have a high resale value like jewelry, electronics and certain types of artwork. Cash value is best for items that are seen more as investments. For example, a car or boat would be more benefit from cash value coverage. If you have any doubts about what type of coverage you should take out, please contact your insurance agent and they will be able to help guide you in the right direction.

It’s your homeowners policy to keep in mind when dealing with fire damage. First, make sure it covers the structure and contents of your home, not just personal belongings. Also check the discounts you can benefit from if you have more than one property insured under the same policy. If your home was built before 1983, you must insure it for more than the building cost.

Homeowners insurance can also provide financial benefits to you as a homeowner. It’s important to understand what your homeowners policy covers and how that coverage can impact you as a homeowner. For instance, assume the worst comes to pass and water damages everything from shelves to furniture and other property in your home. Your homeowners policy will not specifically cover this type of loss because it is not specifically on the list of “act of God” damages outlined by Florida Statute § 527.944(3)(a)-(c). Your homeowners insurance will cover the damage only up to your policy limits unless you have a separate umbrella liability policy.

This is the most common type of coverage used to insure privately owned automobiles. It provides coverage for all damages on your car due to fire, lightning, theft, hail, windstorm explosion and riot. The coverage also extends to damage resulting from collisions with other vehicles or objects such as trees or utility poles. It also includes property damage caused by snow removal from car roofs. Damage caused by vandalism will not be covered but a separate vandalism policy may apply if you have one underwritten by an additional company.

Conclusion:

Many times people don't need homeowners insurance policies because they are covered by other policies. When you own a business, check with your insurance agency to see if you can get some of the business owners policies included on your homeowners policy. There are also less expensive options for rental properties. Check with your agent to find out what would work best for you. The best thing to do when in doubt is call your agent and have them explain everything to you and the options that are available.

You should always contact your local insurance agent or company and get a quote on a new policy before making any final decisions on coverage and price.