Florida home insurance is a term that applies to insurance for a home or condo owner, landlord, or renter. Unlike auto insurance, homeowners insurance is usually required for those with a mortgage and highly recommended for those without. Getting the right policy to fit your individual needs requires a bit of research or a good agent, but the information below will help you get started in the right direction.

What are the factors that determine my home insurance premium?

It’s important to remember that each insurance company is different. Your specific premium is calculated using their unique underwriting criteria, but there are some basic universal factors that are included in most policies. The premium is made up of all the coverages and limits selected on the individual policy. One of the coverages that effects the premium is Coverage A, the amount it would cost to rebuild your home – from material, to labor, to building codes and more. This amount is not necessarily the same as the real estate or market value of your home. If you’re not sure how to estimate your home’s rebuilding cost, you can consult a real-estate agent or contractor, or obtain a full home estimate which might run you about $300. That might seem like a lot, but it’s a small price to pay to be sure that you’re fully covered. A study conducted in 2009 by United Policyholders found that two-thirds of U.S. homes are underinsured. (Tweet this)

Other factors that determine your premium are location and opening protection/wind mitigation. If you live closer to the coast, you’re generally more vulnerable to hurricane damage and will likely pay more for your premium. Opening protection/wind mitigation refers to the steps you’ve taken to upgrade your home’s entry doors, windows, skylights and garage doors with specific wind-resistant features that are verified to meet Florida Building Code requirements.

What is the difference between "actual cash value" and "replacement cost" contents coverage?

When obtaining coverage for your personal belongings (referred to as Coverage C on your policy), it is important to understand how much you’ll be reimbursed in the event of a loss. Most companies include actual cash value coverage – the amount to replace the damaged item with new property of like kind and quality, minus depreciation – in their base policy. For example, if you suffered a loss to a flat screen TV that you purchased in 2010 for $800, you might only receive $400 for it if you were reimbursed for it today with a policy that provides actual cash value coverage for contents. However, if you have replacement cost coverage, you’ll receive the amount it would cost to replace the item with one of the same kind and quality as the original TV in today’s market. Security First Insurance offers this important coverage in its policy. To expedite the process and ensure you’ve accounted for everything in the event of a loss, it’s important to create and maintain a home inventory. It’s also important to check your policy to make sure you’re aware of specific coverage limitations, like expensive jewelry or artwork, that may require special coverage.

What factors should I consider when considering which homeowners insurance to choose?

Price is important, but it’s not the only thing. It’s a great idea to compare several home insurance companies before making a decision. Important criteria to consider: financial stability (does the company have the funds to pay their claims AND conduct business as usual in the event of a hurricane – or multiple hurricanes), how much reinsurance (coverage for hurricane or major disasters) they purchase, and their financial stability ratings. Because most companies do not make this information readily available on their website, you might need to ask them to provide it for you. Another critical factor is excellent service and technological offerings: if your home is destroyed, you want to be able to contact your insurance company quickly and easily – do they offer 24-hour claim service and convenient hours of operation for policy service? If you need to make a payment or ask a question, your company should have tools in place for you to access them on-the-go, 24/7. Security First Insurance offers Security First Mobile, a free app for iPhones and Android devices, and an online customer portal, My Security First, that allows you to conveniently file or check the status of a claim, make a payment and manage your policy, among other helpful transactions. Floridians should also find out where their company is based – can they react quickly in the event of a hurricane? Are they fellow Floridians who truly understand the unique perils faced by homeowners in our state? Every home insurance company is not created equal!

Why does my policy have two separate deductibles?

A deductible is the portion of the total cost of repairs a policyholder must pay for a covered loss. Nineteen states along the Atlantic and Gulf coasts, along with the District of Columbia, have separate deductibles for hurricanes and “all other perils.” An AOP deductible is typically a flat dollar amount and it covers damage from calamities such as fire, lightning or if a pipe bursts inside your home.

• How much is my hurricane deductible? The amount of your hurricane deductible can be found on the Declarations page in your policy packet. It is stated as a percentage of your Coverage A amount, along with the corresponding dollar amount (e.g., if a house is insured for $200,000 and has a 2 percent deductible, the policyholder must pay the first $4,000 of the claim). As a reminder, your Coverage A amount is based on the cost of rebuilding your home, and not on your home’s real estate market value.
• When does a hurricane deductible apply? According to Florida law, the hurricane deductible applies to damage that occurs from the time a hurricane watch or warning is issued for any part of Florida, up to 72 hours after the watch or warning ends, and anytime hurricane conditions exist throughout the state. The hurricane deductible will only apply once during a hurricane season.
• Why is there a separate deductible for hurricanes? Following the devastation caused by Hurricane Andrew in 1992, the Florida Legislature introduced the concept of a separate hurricane deductible; by 1998, all property insurers were required to offer them. Hurricane deductibles have helped make private insurance more available and affordable by allowing consumers to share more of the risk.

What can I do to lower the cost of my homeowners insurance?

Many Florida home insurance companies offer discounts – your carrier or agent can let you know if you qualify. Security First Insurance company offers discounts for the age of the home’s construction, roof age/shape, opening protection, policyholder age (55+), a secure (gated) community, a central burglar / fire alarm, and an indoor sprinkler system. Make sure you check with your insurance provider before making any upgrades to your home so you know what the specific qualifications are. Outside of discounts, you can take a closer look at the amount of coverage you selected in your policy and make adjustments. For instance checking your Coverage C amount to account for only the items you own could result in a lower coverage amount and premium. You don't want too little coverage or too much so make sure your coverage is just right.