If you are considering a homeowner insurance policy, they are mostly similar but some may be deficient in protecting your home. The basic HO-3 form in Florida, which is the basis of a homeowner policy, can be changed by endorsement and limitations. These endorsements and limitations are what the consumer should be wary of. Let’s have a look at a typical Florida homeowner insurance policy and the coverage it provides.
Fire – A homeowner policy will pay for damages resulting from a fire subject to the deductible. Sub limits can apply. For example, if the homeowner has a $10,000 baseball card collection or maybe a $50,000 art collection, the policy will only cover a few thousand dollars in each category unless the homeowner scheduled the collections on the policy. This is considered to be the responsibility of the agent to ask these questions however, a homeowner needs to take some responsibility when purchasing a policy.
Windstorm/Hail – Florida homeowners have wised up to this coverage since the coastal areas of the state are usually threatened each year. With this coverage, particular attention needs to be paid to the deductible since it is usually a percentage of the dwelling coverage NOT A PERCENTAGE OF THE CLAIM.
Therefore, if your deductible is 1% (the usual deductible) and your home is insured for $450,000, your deductible for windstorm/hail will be $4500. That’s a lot of out of pocket money.
Burglary – Most homeowner policies will provide coverage for burglary but not all provide coverage for theft. What’s the difference? With a burglary, there is physical evidence of a forced entry. With theft there is not. So then, if someone breaks into your garage and steals your $600 10 speed racing bike, that’s a burglary. If it is stolen off of your front porch, that’s a theft. Make sure your policy covers both.
Flood – Not covered! You must purchase a flood policy.
Water Backup – This is usually the result of a sewer pipe failing (the city probably owns the pipe) and backing water and other filth into your home. With most policies this must be added by endorsement so be sure and inquire about this valuable coverage.
Sinkhole – Florida policies now provide coverage for “catastrophic ground collapse”. Sinkhole coverage must be endorsed as an additional coverage. Many companies will only offer the sinkhole coverage with a 10% deductible and may even require the homeowner to pay for a geological survey.