When it comes to homeowners insurance in Florida, most people think they’re covered for everything. After all, hurricane threats and flooding are common here, so insurance must handle it all, right? Unfortunately, many homeowners are unaware of potential coverage gaps leaving them financially vulnerable when disaster strikes.
What Are Insurance Coverage Gaps?
A coverage gap refers to a scenario where your homeowners insurance doesn’t provide protection against a specific type of loss. Florida homeowners are particularly at risk for gaps related to hurricane threats, such as flooding and wind damage, because they don’t realize what their policies do and don’t cover.
For example, a standard HO-3 homeowners policy covers wind damage (as from a hurricane) – but doesn’t include flood damage. This means if a hurricane brings heavy rains causing your home to flood, you could be responsible for the full cost of repairs unless you have separate flood insurance.
Common Coverage Gaps in Florida
Here are some specific hurricane threats every Florida homeowner should be aware of:
Flooding Isn’t Covered in Your Homeowners Policy
Many Florida homeowners wrongly assume their home insurance policy will cover flood damage to their home, if the flooding was caused by a hurricane. However, flood damage – no matter the cause – isn’t included in standard homeowners policies. You’ll need to purchase a separate flood insurance policy through the National Flood Insurance Program (NFIP) or a private insurer to cover damages due to flooding aka “rising water.”
Windstorm Deductibles May Surprise You
Florida home insurance policies may often have a separate windstorm or hurricane deductible, which is higher than your standard deductible. This means you could be on the hook for out-of-pockt expenses, if your home is damaged by hurricane-force winds. Make sure you understand your policy’s windstorm and/or hurricane deductible and set aside savings to cover it in case of an emergency.
Mold Growth Can Cost You Extra
Hurricanes can lead to water intrusion, and where moisture lingers, mold can develop. While some policies may cover mold, it’s often limited, and homeowners may be left paying for expensive mold remediation themselves.
Know How Your Roof Is Covered
After a hurricane, many homeowners find out too late their roof is covered for actual cash value (ACV) rather than replacement cost. This means the payout for roof repairs or replacement is reduced based on the roof’s age and other depreciation factors. Opting for replacement cost coverage ensures your roof is covered for its full value, regardless of wear and tear.
Don’t Settle for Depreciated Personal Property
Many policies only reimburse the actual cash value (ACV) of your personal belongings, which subtracts depreciation before reimbursement is made. This means you may not receive enough to replace your items with new ones. Opting for replacement cost coverage on your personal property ensures you’ll get the full value needed to replace your lost or damaged items, without deductions for depreciation.
Building Code Updates Could Cost You
If building codes have been updated since your home was constructed, your standard homeowners policy may not cover the additional costs required to bring repairs or rebuilding up to code after a covered loss. Without ordinance or law coverage, you could be stuck paying the difference out of pocket. Adding this coverage can help ensure you’re not caught off guard by these extra expenses.
Sinkhole Coverage Isn’t Standard
Florida is known for its high risk of sinkholes, but standard homeowners insurance policies typically don’t cover sinkhole damage unless you add a specific sinkhole endorsement. Heavy rainfall from can indirectly contribute to sinkhole formation by saturating the ground and speeding up the erosion of limestone and other underground rock. Without this coverage, you could be left paying out-of-pocket for repairs if a sinkhole causes damage to your home. Make sure you discuss sinkhole coverage with your insurance agent, especially if you live in high-risk areas.
How to Close the Gaps
Closing insurance coverage gaps is easier than you think – you just need to be proactive about reviewing your policy. Here’s how you can make sure your home is properly protected:
1. Review your policy regularly: Sit down with your insurance agent at least once a year to review your coverage. Life changes, home improvements, and even increased flooding risk can impact your insurance needs.
2. Ask about flood insurance: Even if you don’t live in a high-risk flood zone, flood insurance in Florida is a wise investment. More than 30% of flood claims come from those homes outside the high-risk areas.
3. Understand your deductibles: Your policy likely includes two key deductibles: the hurricane deductible and the all-other-perils (AOP) deductible. Depending on your coverage choices, there may be additional deductibles to consider. Knowing exactly what you’ll be responsible for in the event of a claim can help you avoid unexpected costs. If needed, talk to your agent about adjusting your deductibles to a level more financially manageable for you.
4. Opt for ‘replacement cost’: Wherever possible, select replacement cost coverage for your home and personal property. This option ensures you’re reimbursed based on the cost to replace damaged or lost items at today’s prices, rather than their depreciated value, giving you a better chance of recovering more fully after a loss
5. Consider extra coverage: From mold and personal property damage to roof replacements, there may be additional coverage options available to help close potential coverage gaps in your homeowners policy. Talk to your agent about endorsements providing extra protection for your home, such as:
- Increased personal property limits
- Mold coverage
- Ordinance or law coverage
- Sinkhole coverage
Stay Ahead of Hurricane Threats With the Right Mix of Coverages in Your Florida Homeowners Insurance Policy
By addressing potential gaps in your insurance coverage now, you can prevent headaches and financial loss down the road. Remember: insurance is about peace of mind, knowing you’ll be covered in the event of a covered loss. Make sure your policy is working for you by staying informed and proactive. This includes asking the insurance professionals at The Windward Insurance Agency to go over your policy coverage options with you to make sure you’re getting not too much and not too little, but just the right amount of coverage for your needs. Call us at (866) 231-2433 or get a quote online now.
