Unlike car insurance, there’s no minimum legal requirement for home insurance in Florida. Despite this, you also don’t want to arrive home and discover that you left the stove on, realizing it resulted in your home being damaged. Once an accident renders your home uninhabitable, the costs of repairing the damage can add up to an astronomical number. Most homeowners have mortgages that already put them under financial pressure.
According to the South Florida Sun Sentinal, three in every five homes in America are underinsured by an average of 20%. Since The Sunshine State is known to have some of the worst natural disasters in the country, including hurricanes, tornados, tropical storms, wildfires, and floods, Florida homes are more at risk than in other parts of the country. So it’s important to ensure that homeowners don’t get caught without the right coverage when they’re left with a house in disrepair or homeless, due to the whims of Mother Nature.
If the topic of home insurance is not something you’re unfamiliar with and you’re wondering “how much personal property coverage do I need?” then read on for some important factors to consider when choosing how what kind of coverage you require for your home.
What Does Homeowner’s Insurance Cover?
Homeowner’s insurance policies vary in order to accommodate the homeowner’s unique needs. This includes repairs or replacements that are needed due to damage or theft. It also often covers accidental damage to another person’s property, or if an accident occurs on your property.
One of the main reasons for home insurance claims in Florida is natural disasters. Not all insurance policies cover all kinds of natural disasters, which is why it’s important to check with your insurance provider beforehand. For example, damage caused by fire, lightning, tropical storms, and hail are usually covered by homeowners’ insurance but earthquakes and floods usually aren’t.
The main cover in all homeowner’s insurance is dwelling cover, which means that the structure of your home, like the walls and roof, as well as all structures attached to your home, including the garage, are all covered. Dwelling cover covers a variety of losses to the structure of your home, including fire, lightning, wind, hail, theft, and vandalism.
Calculating the Value of Your House
The value of your home insurance should be equal to the amount it would cost to rebuild your home with similar materials if something were to happen to it. But bear in mind that the increased cost of labor due to inflation needs to be taken into consideration as well.
In order to calculate the replacement cost of your house, you would need to take the square footage of your house (not the entire property, only your home’s floor size) and multiply it by average local construction costs. You can find good cost estimates of what construction would cost on most construction companies’ websites. Alternatively, you can ask your insurance agent to provide you with them. You can also use an online replacement cost calculator for this.
Unsurprisingly, a premium house costs a lot to replace, but there are specific things that really impact the replacement cost. These are:
- Kitchen countertop quality and design
- Flooring – premium flooring like hardwood flooring can be particularly expensive
- Attached fixtures
- Crown molding
If you have other structures on your property that aren’t attached to your house, such as a detached garage, a shed, or your perimeter walls, these will also be covered by most homeowner’s insurance. It also covers the contents of your home such as your furniture or electronic devices if they are lost, damaged or stolen. However, you may need to purchase additional cover for very valuable and expensive items such as jewelry.
It’s also important to bear in mind that your house’s replacement value is not the same as its market value. The factors that determine its market value, such as supply and demand, as well as the value of the land, are not the same as those that determine replacement cost, which only includes what it would cost to rebuild your house from scratch.
How Much Home Insurance Do I Need?
One of the biggest risks associated with homeowner’s insurance is not having enough. When deciding how much home insurance you need, there are many factors that come into play. Some questions you should ask yourself are:
- Do you have a lot of valuable items in your home such as jewelry and antique furniture?
- Are you covered no matter how your home is damaged, i.e. if your house were to be wiped out by a natural disaster such as a tornado?
- Are you covered if an accident occurs or someone is injured in your home?
- How old is your home and were expensive materials used to construct it?
- Do you have any other structures on your property that aren’t attached to your house?
When deciding to take out a home insurance policy or change your current policy, it makes the process run a lot smoother if you have a detailed inventory of all the items in your home as well as their value. Always remember to keep all receipts in a safe place so that you can prove when and where you bought the item and how much you paid for it.
Depending on the insurance company, you can also reduce the amount of your monthly premium through credits such as installing a burglar alarm and smoke detectors in your home.
The Importance of Home Renter’s Insurance
Renter’s insurance, also called home and contents insurance, covers all your belongings inside the house you’re renting and also includes off-premises coverage, so if you’re traveling and something happens to your luggage, or if you leave something in your car and it’s stolen, you should be able to claim for it. However, always check with your insurance provider to make sure you can claim for your belongings even if you lost them while travelling.
Home renter’s insurance also entitles you to stay in a hotel or other temporary accommodation if the house or apartment you’re renting becomes damaged or destroyed. Your accommodation should be covered for the duration of time it takes to repair the dwelling where you were renting, or until you find a new place to rent.
Damages covered by renter’s insurance includes the replacement or repair of your belongings due to fire or water damage. The last thing you want is to come home to discover that the geyser has burst and water has damaged your antique coffee table, but these things happen. With renter’s insurance, you know that you can get it repaired or replaced.
However, although renter’s insurance offers standard coverage for the theft or damage of your belongings, if you have particularly valuable assets such as jewelry or expensive electronics you might want to consider purchasing an endorsement to cover these higher risk items.
Renter’s insurance also provides liability coverage in case someone is injured in your rented house. This could include injuries from falls, dog bites and should also cover legal costs if an injured third party decides to sue you for the injuries sustained on your property.
Renter’s insurance is cheaper than homeowner’s insurance because it doesn’t cover the expensive cost to entirely rebuild a house and it is definitely worthwhile because it gives you peace of mind that all your belongings are covered. It’s important to bear in mind that your landlord’s homeowner’s insurance usually doesn’t cover your personal items.