Talking with your insurer a good policy
Posted: Saturday, June 20, 2015 6:00 am
Homeowners insurance policies in the state of Florida are quite complex due to hurricane codes, continuous changes in the law and concern for the viability of the state-created Citizens Property Insurance Corporation.
Angela Taylor is an agent and office manager for Frank Slaughter Insurance Agency Inc. in Wildwood, a company her grandfather founded 51 years ago. She sees the new trends in buying insurance online or through a 1-800 number as a mistake for many homeowners. Taylor says a lot of consumers are making insurance decisions primarily on price instead of need and the actual coverage of the policy.
Taylor believes many homeowners are not getting the coverage they need, or think they have, despite a law that mandates insurance carriers provide a clear, written description of the policy in layman’s terms. The reason is simple — most homeowners do not read their policy and only discover how bad it is when they go to make a claim.
“You don’t have a conversation on the Internet, and you normally don’t have licensed insurance staff talking to you from a 1-800 number,” she said.
Taylor suggests homeowners review the rating on insurance companies in the state because there have been many new companies starting up since 2004. Those new insurance companies do not have the actual cost experience of a hurricane and they are banking on the hurricane drought continuing. The problem for these companies, as well as the homeowners they insure, will be their ability to pay claims when a widespread disaster occurs.
Citizens Property Insurance Corporation was created by the state of Florida and using this insurance company is a last resort for many homeowners. Homeowners living in certain hurricane-prone areas, as well as those with multiple claims for fire and theft, may be forced to purchase Citizens Property Insurance. According to Taylor, dog bites are another reason why many homeowners are forced into the more expensive Citizens Insurance Program. She cautions homeowners with dogs to review their policy limitations.
Another area that Taylor points out as a potential problem is coverage for unique items such as collectibles, guns and jewelry. Many homeowners believe erroneously that their content coverage is enough to cover all items in the home, but many policies are written with very specific limits of coverage for unique items.
Typically, full coverage of unique items requires the homeowner to declare the items separately on the policy and it may cost a little more. In addition to declaring these valuables, she strongly suggests taking pictures or videos of all valuables in the home and placing that information on a portable flash drive for safekeeping.
Taylor points out that understanding hurricane deductibles that occur when a named storm threatens Florida is also important for homeowners. At 2 percent of the home’s value, a hurricane deductible will be much higher than the deductible for a fire or wind claim not associated with a hurricane.
Flood insurance is just as confusing.
“Flood zones are the reverse of what we learned in school, with A Zones being worse than B and C Zones,” Taylor said, adding, “more claims are made in B and C Zones” because most floods are the result of rising waters from within smaller areas.
Flood insurance may be required when as few as two homes are flooded as a result of street flooding from a heavy thunderstorm. Most homeowners give little thought to street flooding or an overflowing swimming pool as the reason to have flood insurance, which is about $430 per year for a $250,000 policy in a preferred zone.
To learn more about flood insurance or other items in this column, I suggest you have a conversation with your insurance agent — it just might save you some money.
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