Do You Have Enough Florida Homeowner's Insurance?

The cost of Florida homeowner’s insurance—like the cost of everything—is on the rise. Florida is prone to hurricanes, thunderstorms and tornadoes that cause significant property damage, and insurers are quietly raising premiums while scaling back coverage at the same time. Here are some things to consider when you purchase your policy.

The Paradox of Shopping Around

Consumers often compare various insurance policies by considering two factors: price and reputation. In fact, very few homeowners actually take the time to ask about the things that are covered, the amount of coverage they will receive in certain situations, or even if they will receive the actual cash value of damaged property or the replacement cost. These days, many insurance companies do not even provide consumers with a copy of their policies until after they have been purchased and, even when they do, they rarely take the time to read the endless pages of paperwork. This can cause some serious problems in the event of an actual disaster, robbery or other event.

Legal Terms in Policies

While parts of your Florida homeowner’s insurance policy may be easy to read, exclusions are often hidden in clauses that are written in ‘legalese’ and buried within the middle of the policy—exactly where the insurer hopes you won’t look. This practice remains perfectly legal and, although consumers truly believe they understand their coverage, many do not. The best way to ensure that you know exactly what is covered in the event of a disaster or other emergency is to ask a lawyer or even a paralegal to review your documentation. On the same note, you should always ask for a copy of the policy before you provide a signature or make a single payment.

Why Insurers Cut Corners

A recent story showed that, in 2011, insurers paid out double what they paid in 2002 for Florida homeowner’s insurance claims. This has been blamed on many things, but the increase in property values along with the number of significant weather events that affect the state are the prime culprits. Rather than dropping homeowner’s insurance from their lineup of offerings, many companies simply upped the premiums significantly or made serious cuts in coverage. As such, homeowners who were once completely covered in the event of a hurricane or flood may find that they are required to pay tens of thousands of dollars out of pocket.

What Homeowners Should Do

Although there is not much that you can do about the rising cost of Florida homeowner’s insurance, there are some ways in which you can protect yourself. As previously mentioned, make sure that you are provided with a complete policy before you make a payment. Similarly, you can ask a lawyer to look over the policy before you sign so that you have a complete understanding. Finally, when you are shopping for insurance coverage, remember that the lowest premiums often mean the least coverage; do not let a company’s good reputation fool you into thinking that you are receiving the best policy for your individual needs.

Your home is your biggest investment, so your Florida homeowner’s insurance policy should cover it as much as possible. You should also pay close attention to whether or not your policy contains flood insurance as this is one of the most commonly excluded things for Floridians.