Florida home insurance

Florida home insurance is a very risky business these days. Without any hurricanes for the past 5 years, companies continue to lose money. Some even fail completely and have been taken over by the state. With all of this uncertainty, many homeowners feel overwhelmed when trying to find quality Florida home insurance. The worry becomes once they choose a homeowners company, how uncertain is that companies future and will they be around to pay their claim.

While it is impossible to predict when the next hurricane will make landfall and which companies may fold because of it, we can take measures to protect ourselves, and our policies. A great resource to use is Demotech.com to discover an insurance company’s Financial Summary. Listed in this summary is the Policyholders’ Surplus, which gives a fairly clear picture of its claims paying ability. For instance, a company with less than $20 million dollars in Policyholders’ Surplus is chicken feed. With the average Florida home insurance policy insuring $250,000 in Dwelling coverage, it would only take a handful of homes destroyed to put that company out of business and into receivership.

The real problem with having Florida home insurance with a small company is the possibility of having to rely on the Florida Insurance Guaranty Association or FIGA for short. Created by the Florida legislature, this group handles the claims of insolvent insurance companies. The difference between the actual company paying its own claim and FIGA is the amount a homeowner will be paid. The maximum amount paid on a claim is only $300,000. When adding together the cost of the physical structure of the home as well as the contents, such as personal property, $300,000 very well may only cover a small portion of the total damages. The rest is left on the shoulders of the homeowner.

It is very crucial to find quality Florida home insurance that is affordable. Also choose a reputable insurance agent that will take the time to explain the coverages and deductibles. Also, find an agent that will tell you the benefits of having replacement cost over actual cash value (which is the depreciated amount). The difference is so small for the year it doesn’t make sense to not carry replacement cost on your homeowners policy. Lastly, make sure you are aware of the company’s financial situation before entrusting them with quite possibly the largest investment you own.