Insurance
FAQ
Frequently Asked Questions
What protection does the personal liability coverage in my homeowner's
insurance policy provide?
This coverage protects you and all family members living with you against
claims or lawsuits resulting from bodily injury or property damage to others
for which you are legally liable, with the exception of intentional acts.
What is a deductible?
The amount which an insured must pay, per claim or accident, before the
insurance company pays its part.
What is subrogation?
The circumstance where an insurance company takes the place of an insured in
bringing a claim against a third party who caused damage to an insured. For
instance, if a third party, through negligence, damages an insured's car and
the insured's insurance company pays to repair the car, the insurance
company has recourse against the third party for the costs involved.
What about Policy Changes?
If you want to make policy changes, contact your agent; he or she can
provide you with information about rates and coverages. It is
especially important to do this prior to hurricane season.
What does homeowners insurance cover?
Homeowners insurance provides protection for your home, personal property
such as furniture, clothing, appliances as well as for personal liability.
It protects you from a variety of events, including fire, lightning,
burglary, vandalism, storms, explosions, and more. Please see About Your
Policy for a detailed description.
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What should I look for in a homeowners insurance provider?
Make certain that the company insuring your home is financially strong. Be
sure the company is easy to contact. Many companies provide an
around-the-clock service center that can be called 365 days a year.
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What's the right amount of insurance for my home?
Your coverage should match the value of your home. Homeowners insurance
cannot cover the land your home is on, only the structure. That means that
the insurance amount could be less than the purchase price or loan amount.
FloridaSelect utilizes cutting-edge technology by using the BOECKH system to
properly analyze your needs.
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What is "replacement" coverage?
In general, replacement coverage means that in the event of a loss, the
insurance company will pay what it costs to replace the property at today's
prices. Please check with your agent regarding replacement coverage.
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Does my homeowners insurance cover my personal property?
Homeowners insurance will also cover the property you own as well as the
structure itself. Your clothing, furniture, appliances, and other belongings
will usually be insured up to a maximum limit.
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What about flood insurance?
If your property is officially designated as being in a special flood hazard
area, you must obtain flood insurance. While the federal government provides
most flood protection, you are responsible for applying and obtaining this
coverage.
It's important to know that flood insurance is not included in a standard
homeowners policy. Even if your home is not in a special flood hazard area,
you may wish to consider whether you need flood insurance. FloridaSelect
offers flood insurance for structures up to $250,000.
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I am confused about the amount of Homeowners insurance coverage I
should buy for my home. How much is enough?
Homeowners insurance covers both damage to your property (your home, garage
and their contents) and the liability of you and your family arising from
their actions (such as a lawsuit arising from your child accidentally
injuring another child during a baseball game.) "Enough" needs to
take both of these types of losses into account.
Property Insurance: If all you want to do is pay off your mortgage and walk
away from the property, "enough" would be the outstanding balance
of your mortgage.
The replacement cost of the home is the amount it will cost you to rebuild
the house with material of like kind and quality (excluding the foundation,
which is usually not damaged during a loss). It is not any of the following:
The market value of the house
The assessed value of the house, or
The value the mortgage company used as its worth.
All of these values include the cost of the land and the foundation of the
home.
If you want to rebuild the house and replace the contents, you will need to
insure for considerably more than the amount of any outstanding mortgage.
Unless you insure for at least 80% of the replacement cost of your home (the
building itself, not including the cost of the land and the foundation,) if
you have a loss, you will be "underinsured" and the insurance
company will not pay the full loss. While a discussion of
"coinsurance" and the "coinsurance penalty" is beyond
the scope of this question, your insurance agent can give you examples of
what might happen. You should remember that even if you insure for at least
80% of the replacement cost of the home but less than the full replacement
cost, the loss may exceed the amount of insurance. In that case, the
insurance company will only pay the policy limit, leaving you to pay the
remainder yourself. Many companies offer some type of "guaranteed
replacement cost" or "inflation guard" endorsements which
will increase the value of the property as construction costs increase.
Special valuation situations: the homeowners policy is designed for the
typical house. If your house was built before World War I, has hand-made
details, stained glass windows, or unique features not commonly found in
houses today, the homeowners policy may not provide adequate coverage. Your
agent can help you tailor the policy to your particular needs.
Liability Insurance:
The basic homeowners policy provides $100,000 of coverage, which, for many
individuals, is sufficient. Higher limits are available for an additional
premium.
If you have an umbrella policy, you should determine what limits of
insurance it requires for your primary policy. FloridaSelect currently
offers $100,000, $200,000 and $300,000 liability limits.
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What is the difference between actual cash value and replacement cost?
Replacement Cost is the amount to repair or replace the damaged property
using materials of the like kind and quality, without deduction for
depreciation. Depreciation is the loss of value that develops as an item
ages, wears out, or becomes obsolete. Actual Cash Value is the replacement
cost of an item, less the amount for depreciation.
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My insurance company just notified me that they are not renewing my policy.
Can they do this and are they required to send me a non-renewal notice by
certified mail?
Under Florida law, your company must notify you of their decision not to
renew your policy, at least 90 days prior to its expiration date. Your
insurance company does not have to send you a notice by certified mail. They
are only required to use First-Class Mail Proof of Mailing, to the address
listed on your policy.
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