Types of Hazard Coverage
You have many options to choose from when buying hazard insurance. You can typically choose your coverage limits, deductible amount, and policy endorsements.
Another consideration is the type of coverage. Typically, insurers have three types of coverage:
Actual cash value pays for the cost to rebuild your house and replace your belongings after deducting depreciation. The payout is capped at the policy limit.
Replacement cost pays to rebuild or replace the house and contents at current market prices. The payout is capped at the policy limit.
Guaranteed replacement value pays for the cost to rebuild the home and replace the contents even if the price is more than the policy limit.
Actual cash value (ACV) coverage is usually the cheapest type of policy to purchase. It can also cover the least amount if you file a claim. Replacement coverage can generally cover the cost to rebuild or replace your belongings with new versions.
Guaranteed replacement value, sometimes called extended replacement cost, is the most comprehensive coverage option. If a hazard devastates your neighborhood or town, the cost of building materials and home furnishings can skyrocket. With guaranteed replacement coverage, the home insurance company can pay more than the policy limit.
What does hazard insurance cover?
Every insurance company has a list of what’s covered and what isn’t. Hazard insurance generally includes some of the most common hazards. For a covered loss, the insurance company will pay to rebuild your home.
What your policy covers can vary, but it typically includes coverage for fire, lightning, windstorms, hail, smoke, vandalism, and theft.
Hazard insurance in Florida also covers hurricanes. Florida law requires property insurers to include hurricane coverage in homeowners, mobile homeowners, renters, and condo owners insurance.
There’s just one catch: it only applies to wind damage, and only if the National Hurricane Center declares the storm to be a hurricane.
Keep in mind that this isn’t a complete list. Read your insurance declaration page to find out what your policy covers. If you have questions, reach out to your insurance agent for clarification.
What isn’t covered?
Every homeowners policy includes hazard insurance. But not all policies are created equal, and some hazards are specifically excluded.
Standard home insurance coverage doesn’t include flood damage. You need a separate flood insurance policy to protect your home and belongings from flooding.
It also does not cover termites and insect damage, bird and rodent damage, rust, rot, mold, or general wear and tear.
How much does home insurance cost?
According to a report from the National Association of Insurance Commissioners, the average homeowners insurance policy in Florida costs $1,960 per year.
Insurance premiums vary greatly from city to city. The price you pay depends on many factors:
Finding the best and cheapest home insurance in Florida is important to protect your house and budget.
Installing wind mitigation features can lower your insurance rates. Your insurer should notify you of wind-resistant fixtures or construction techniques that can qualify you for a discount. The savings could be significant—up to 42 percent off the hurricane windstorm portion of your policy.
You could also lower your insurance costs by bundling your home and auto insurance. Explore the average cost of car insurance in Florida to get an affordable insurance quote and see how much you could save.
Flood Insurance in Florida
The World Health Organization recognizes floods as the most common and most frequent type of natural disaster. Florida is no exception, and flooding can happen at any time.
You can’t control flood damage, but you can control the amount of protection you have against it. Hazard insurance in Florida doesn’t cover flooding. You must purchase a separate flood insurance policy to protect your home and family from flood damage.
Don’t wait until disaster strikes. Flood policies can take up to 30 days to take effect.
Tornado Insurance in Florida
You might think tornadoes aren’t common in Florida because it’s outside of Tornado Alley. But the high number of thunderstorms causes several tornadoes each year. Tropical storms and hurricanes can also cause tornadoes when the storms move ashore.
Luckily, most homeowners insurance covers tornado damage to your home and personal property. It’s best to read your policy to understand what’s covered. If your policy includes windstorm damage, it probably will cover tornado damage.
Hurricane Insurance in Florida
Hazard insurance doesn’t cover hurricanes in every state. Under Florida law, insurers must include coverage of hurricane damage in property insurance policies.
You can get Florida hurricane insurance when you buy a homeowners, mobile homeowners, renters, or condo owners insurance policy.
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