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quote!
Homeowners
Insurance
2260 Gulf to
Bay Blvd. Clearwater, FL 33765 Phone: 727-669-4777 Fax:
727-669-8407
For a quick
estimate of the amount of insurance you need, multiply the total square footage
of your home by local building costs per square foot. To find out construction
costs in your community, call your local real estate agent, builders association
or insurance agent.
Factors that will determine the cost of rebuilding your
home:
Replacement
cost policies.
Most policies cover replacement cost for damage to the structure.
A replacement cost policy pays for the repair or replacement of damaged property
with materials of similar kind and quality. There is no deduction for
depreciation -- the decrease in value due to age, wear and tear, and other
factors.
If you purchase a flood insurance policy, coverage for the
structure is available on a replacement cost basis.
Guaranteed or
extended replacement cost coverage.
After a major hurricane or a tornado,
building materials and construction workers are often in great demand. This can
push rebuilding costs above homeowners policy limits, leaving you without enough
money to cover the bill. To protect against such a situation, you can buy a
policy that pays more than the policy limits.
An extended
replacement cost policy will pay an extra 20 percent or more above the limits,
depending on the insurance company. A guaranteed replacement cost policy will
pay whatever it costs to rebuild your home as it was before the fire or other
disaster.
Building codes.
Building codes are updated periodically and
may have changed significantly since your home was built. If your home is badly
damaged, you may be required to rebuild your home to meet new building codes.
Generally, homeowners insurance policies (even a guaranteed replacement cost
policy) won't pay for the extra expense of rebuilding to code. Many insurance
companies offer an Ordinance or Law endorsement that pays a specified amount
toward these costs. (An endorsement is a form attached to an insurance policy
that changes what the policy covers.)
Inflation guard.
Consider adding an
inflation guard clause to your policy. This automatically adjusts the dwelling
limit when you renew your policy to reflect current construction costs in your
area.
Older homes.
If you own an older home, you may not be
able to buy a replacement cost policy. Instead, you may have to buy a modified
replacement cost policy. This means that instead of repairing or replacing
features typical of older homes, like plaster walls and wooden floors, with
similar materials, the policy will pay for repairs using the standard building
materials and construction techniques in use today.
Insurance companies
differ greatly in how they insure older homes. Some won't insure older homes for
the replacement cost because of the expense of re-creating special features like
wall and ceiling moldings and carvings. Other companies will insure older homes
for the replacement cost as long as the dwelling is in good condition.
If you can't insure your home for the replacement cost or choose
not to do so -- in some cases, the cost of replacing a large old home is so high
that you might not want to replace it with a house of the same size -- make sure
the limits of the policy are high enough to provide you with a house of
acceptable size and quality.
Your personal
possessions
Most homeowners insurance policies provide coverage for your
personal possessions for approximately 50% to 70% of the amount of insurance you
have on the structure or “dwelling” of your home. The limits of the policy
typically appear on the Declarations Page under Section I, Coverages, A.
Dwelling.
To determine if this is enough coverage, you need to conduct a
home inventory. This is a detailed list of everything you own and information
related to the cost to replace these items if they were stolen or destroyed by a
disaster such as a fire. If you think you need more coverage, contact your agent
or insurance company representative and ask for higher limits for your personal
possessions.
Replacement Cost or Actual Cash Value.
You can insure
your possessions in two ways. You can either insure your belongings for their
actual cash value or their replacement cost.
A cash value policy pays the cost to
replace your belongings minus depreciation. A replacement cost policy, on the
other hand, reimburses you for the cost to replace the item.
Suppose, for
example, a fire destroys a 10-year-old TV set in your living room. If you have a
replacement cost policy for the contents of your home, the insurance company
will pay to replace the TV set with a new one. If you have an actual cash value
policy, it will pay only a percentage of the cost of a new TV set because the TV
has been used for 10 years and is worth a lot less than its original cost. Some
replacement cost policies also replace the item and deliver it to
you.
Generally, the price of replacement cost coverage is about 10%
more than actual cash value. If you need a flood insurance policy, you can
purchase flood insurance for your belongings. It is only available, however, on
an actual cash value basis.
Insuring expensive items with
floaters/endorsements.
There may be limits on how much coverage
you get for expensive items such as jewelry, silverware and furs. Generally,
there is a limit on jewelry for $1,000 to $2,000. You should ask your agent or
look it up in your policy. This information is in Section I, Personal Property,
Special Limits of Liability. Insurance companies may also place a limit on what
they'll pay for computers.
If the limits are too low, consider buying
a special personal property floater or an endorsement. These allow you to insure
these items individually or as a collection. With floaters and endorsements,
there is no deductible. You are charged a premium based on what the item (or
collection) is, where you live and its dollar value.
You can determine
the value by providing your agent with a recent receipt or getting the item or
collection appraised.
Additional living expenses after a disaster
This is a very
important feature of a standard homeowners insurance policy. This pays the
additional costs of temporarily living away from your home if you can't live in
it due to a fire, severe storm or other insured disaster. It covers hotel bills,
restaurant meals and other living expenses incurred while your home is being
rebuilt.
Coverage for additional living expenses differs from company to
company. Many policies provide coverage for about 20% of the insurance on your
house. Some companies will even sell you a policy that provides you with an
unlimited amount of loss of use coverage, for a limited amount of time.
If you rent out part of your house, this coverage also reimburses
you for the rent that you would have collected from your tenant if your home had
not been destroyed.
You should talk to your agent or company to make sure you know
exactly how much coverage you have and how long the coverage will be in effect.
In most cases, you can increase this coverage for an additional
premium.
Liability to others
This part of your policy covers you against
lawsuits for bodily injury or property damage that you or family members cause
to other people. It also pays for damage caused by pets. It pays for both the
cost of defending you in court and for any damages a court rules you must pay.
Generally, most homeowners insurance policies provide a minimum of
$100,000 worth of liability insurance, but higher amounts are available.
Increasingly, it is recommended that homeowners consider purchasing at least
$300,000 to $500,000 worth of coverage of liability protection.
Umbrella or
Excess Liability.
You should buy enough liability insurance to protect your assets.
If you own property and or have investments and savings that are worth more than
the liability limits in your policy, you may consider purchasing an excess
liability or umbrella policy.
Umbrella or excess liability policies
provide extra coverage. They start to pay after you have used up the liability
insurance in your underlying home (or auto) policy. An umbrella policy is not
part of your homeowners policy. You have to purchase it separately. In addition
to providing a higher dollar amount, they offer broader coverage. You are
covered for libel, slander, and invasion of privacy. These things are not
covered under standard homeowners or auto policies.
The cost of an
umbrella policy depends on how much underlying insurance you have and the kind
of risk you represent. The greater the underlying liability coverage, the
cheaper the policy. This is becaue you would be the less likely to need the
additional insurance. Most companies will require a minimum of $300,000 on your
home and your car, if you own one.
Homeowners Coverage
How much homeowners insurance do I need?
You need enough insurance to cover the following:
| · |
The
structure of your home. |
| · |
Your
personal possessions. |
| · |
The cost
of additional living expenses if your home is damaged and you have to live
elsewhere during repairs. |
| · |
Your
liability to others. |
| · |
The
structure |
You need enough insurance to cover the cost of rebuilding your
home at current construction costs. Don't include the cost of the land. And
don't base your rebuilding costs on the price you paid for your home. The cost
of rebuilding could be more or less than the price you paid or could sell it for
today.
Some banks require you to buy homeowners insurance to cover the
amount of your mortgage. If the limit of your insurance policy is based on your
mortgage, make sure it's enough to cover the cost of rebuilding. (If your
mortgage is paid off, don't cancel your homeowners policy. Homeowners insurance
protects your investment in your home.)
| · |
Local
construction costs |
| · |
The square
footage of the structure |
| · |
The type
of exterior wall construction -- frame, masonry (brick or stone) or
veneer |
| · |
The style
of the house (ranch, colonial) |
| · |
The number
of bathrooms and other rooms |
| · |
The type
of roof and materials used |
| · |
Other
structures on the premises such as garages, sheds |
| · |
Fireplaces, exterior trim and other special features like
arched windows |
| · |
Standard
homeowners policies provide coverage for disasters such as damage due to
fire, lightning, hail, explosions and theft. They do not cover floods,
earthquakes or damage caused by lack of routine
maintenance. |
| · |
Improvement to your home - adding a second bathroom,
enlarging the kitchen or other additions that have added value to your
home |
| · |
Whether
the house, or parts of it like the kitchen, were custom built
|
