Seven things to know about home insurance in Florida

Home Insurance in Florida

Sunshine, palm trees, beaches, Disney World - and hurricanes: these are all part and parcel of life in Florida, one of the two most visited states of the United States.

This year three hurricanes have hit Florida so far, making it match the tallies of five other years since 1871. So no, this trend is nothing new, but if you own a villa or condominium in Florida, insurance is going to be a top priority. Buying home insurance will protect yourself, anyone who rents your home, and your property. It will bring you peace of mind when you are sitting across the Atlantic feeling helpless when a hurricane makes landfall. Jerry Barker of The Jerry Barker Group shares some tips to consider when shopping for a policy.

1. Work with an expert insurance brokerage

Find an expert insurance broker who is local to the area you are buying in and understands the coverage you need. Being on the Gulf Coast is very different to inland Orlando, as Hurricane Milton showed. The right broker will help you get the best policy by shopping around each of the companies that write second home - and short-term rental, if applicable - policies, and then present to you the top options that fit your needs.

2. Floods, water and wind events

As per most places, Florida has flood maps. Determine if you are in a flood zone before buying. Flood zones X, B, and C are considered ‘moderate to low risk’, which means flood insurance may not be required. Your broker will be able to advise if you need to add flood insurance to your policy. You can get your overall flood risk at www.floodsmart.gov and enter the address. Another key thing to beware is whether your 'hurricane insurance' covers floods – often covered separately to wind events. Of course, hurricanes can be both. Make sure you don’t get caught out by not having separate flood insurance – if needed.

3. Take advantage of discounts – and check the roof

Insurance companies may offer discounts for specific items such as roof construction and condition. If the roof is older than 15 years your premiums may be higher, and a new roof may be costly yet shave off hundreds. Be aware of this while negotiating a contract. While getting a home inspection conducted, also consider ordering a wind mitigation report. Many insurance companies offer a discount to properties with a favourable wind mitigation profile.

4. Get an umbrella for guests

No, you read that right. If you rent out your property commercially, you will need extra insurance cover. To protect you from any potential guest liability, ask your broker to add an ‘umbrella policy’ with liability coverage up to $1 million to protect you from any guest mishaps in the home, pool or garden.

5. Start your policy before you complete

If you are taking out a mortgage, you cannot complete on your home without an insurance policy. If a named storm is in the Florida vicinity, insurance companies will not bind (start coverage on) a policy until the storm passes. Secure an insurance policy early so completion will not be delayed. It won’t cost you anymore.

6. Confirm your ‘hurricane deductible’

The ‘hurricane deductible’ is the amount you pay before receiving money from the insurance company when making a claim due to hurricane damage. It’s similar but not quite the same as an ‘excess’ in terms of the way it operates. The lower the deductible, the higher the premium so discuss the hurricane deductible with your broker before selecting your policy.

7. Understanding “Force Majeure”

“Force Majeure” pertains to hurricanes, floods, extreme weather, earthquakes, fire, or other “acts of God”. In the event of a “Force Majeure” event, all contractual time periods for buyers and sellers are automatically extended for a period of seven days. This means deposit, inspection, loan approval, closing dates etc. may be extended if required. This will allow the process to reset with new milestone dates for the transaction if they are required by the buyer or the seller.

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