Although buying home insurance doesn’t require quite the same leap of faith as buying a house, it’s still a good idea to shop around and research your Florida homeowner insurance policy. But bargain hunters beware: price, while important, isn’t everything. Use the tips below to conduct your home insurance comparison shopping with savvy:
- Take a cue from Goldilocks – make sure your coverage is "just right." According to a 2013 report by Marshall and Swift/Boeckh, a building cost information company, 60 percent of U.S. homes are underinsured by an average of 17 percent. That means that if those homes were destroyed, those policyholders may not receive enough money to rebuild their home. Conversely, you don’t want to be overinsured, either, and pay for more coverage than you need. It’s important to remember that your insurance coverage should be based on the cost of rebuilding your home and not on real estate market values. (Tweet This)
- Make sure your home insurance company’s financial foundation is on solid ground. Take time to conduct the following research before purchasing a policy:
- Company ratings: Demotech, Inc. rates all Florida home insurance carriers (except for state-run Citizens Property Insurance Corporation), using several quantitative ratios to evaluate each carriers’ solvency and assign an appropriate Financial Stability Rating® (FSR). Security First Insurance is an A-rated carrier.
- Financial Stability/Reinsurance: The moment of truth for your insurance company occurs when you have to file a claim. Will your insurance carrier be there for you after a hurricane (or, even worse, a multiple hurricanes)? Florida home insurance companies need the financial stability that comes from a robust reinsurance (insurance for insurance companies) program. Contact your insurance company or review their website to obtain information on the company’s financial stability. If this information isn’t publicly available, you should consider switching companies.
Tip: Your insurance carrier may have been “A rated” when you purchased your policy , but financial stability can change over time. You should conduct an annual review of your insurer’s financial stability. A good time to do this is June 1st when most Florida home insurance companies have purchased reinsurance for the upcoming hurricane season. An inadequate reinsurance program could be a sign that the company has poorly managed its growth and might not be able to pay claims in the event of a major storm. (Tweet This)
- Make sure the coverage they offer can withstand the winds of change:
- Ordinance or Law Coverage: Building codes continue to change, based on research and technological advancements. If your home is damaged and you did not select Ordinance or Law coverage on your policy, you’ll only receive enough reimbursement to rebuild your home based on the codes that were in effect at the time of construction. If building codes have changed since that time, you may not have enough funds to completely rebuild. Security First Insurance Company includes Ordinance or Law coverage in its homeowners’ insurance policy. If you do not have a policy with us, this coverage is most likely optional at an additional cost.
- Replacement Cost Contents Coverage: This coverage gives you the protection necessary to replace lost or damaged property with new property of like kind and quality at current prices. The alternative, and usually standard coverage offering, is Actual Cash Value coverage, which factors depreciation and age of your items when calculating your reimbursement amount. Replacement Cost Coverage is often available for an additional premium. Security First Insurance Company includes Replacement Cost Coverage on Contents in its policies.
- Don’t Fall Into the Gap: Just like auto insurance, there are certain mishaps that aren’t covered by your homeowners insurance policy. It’s important that you understand these gaps and purchase coverage to make certain you have the insurance you need. For instance, flood insurance is not included in a standard homeowners insurance policy. Insurance agents are trusted advisors who can provide helpful guidance about policy coverage limitations and gaps, and they can help you address how to mitigate damage resulting from power failures, sewage drain backups, mold, insects, and losses due to poor workmanship or defective materials.
- Is the company digitally connected? Does the company meet your technology expectations in today’s mobile world? Are the digital services (website, online customer portal and quote tool, etc.) optimally designed for viewing on all of your devices? Are you able to complete actions when you want and on any device? Have they implemented technology solutions to provide customers with excellent service, especially after a catastrophic event when traditional channels of communication are unavailable? You deserve to do business with a company that is fully equipped to assist you in your greatest time of need.
Although it hardly qualifies as a fun activity, it’s important to compare your options to make sure you’re getting the most bang for your Florida home insurance buck.
Related post: How to Read Your Homeowners Insurance Policy
Also: Now that you know what to look for, get a Florida home insurance quote today!