Hurricane Insurance 201

It’s one of those things you know you should do – but many of us don’t actually follow through: Reviewing your homeowners insurance policy before the Florida hurricane season heats up.

Like many other aspects of hurricane preparedness, homeowners insurance review is something that’s easy to put off but can be expensive if you don’t follow through.

To help older Floridians tackle this important task, AARP Florida’s Leslie Spencer recently discussed insurance with Tasha Carter, director of the Division of Consumer Services in the office of Chief Financial Officer Jimmy Patronis. AARP Florida held a Facebook Live event of their discussion. (https://www.facebook.com/aarpfl/videos/850821261942976/ )

To help you get focused, here are some tips from AARP and Patronis’s office to consider when looking over your policy:

• Is your coverage adequate? Because windstorm insurance is often expensive – especially in coastal zones – insurance costs can be much higher than the 2019 national average of about $1,100 per year for a typical home. It’s not uncommon to see policy costs of double, triple or quadruple that amount, especially if your home is larger, more expensive or located in a coastal wind zone.

It can be tempting to skimp on coverage if costs are high. But weigh the costs of being underinsured against the severe financial hit you’d take if your home was destroyed and your coverage would fall far short of what it would cost to repair or replace your home.

State officials advise against insuring your home only for what it cost to build originally, or its value for property-tax purposes. Calculate what it would cost at current prices to replace the home, including costs you might face to bring an older structure into compliance with current building codes.

• Older Floridians who’ve lived in the same home for many years may even be tempted to drop their homeowners insurance completely. Most homeowners first get a homeowners insurance policy when they buy a home, since it’s required by their mortgage lender. If you’ve paid off your mortgage, and no longer have that requirement, it may seem much less expensive to drop your coverage altogether.

AARP Florida volunteers and staff worked with several older residents of the Bay County area, who had dropped their insurance coverage once they paid off their mortgages. Then came Hurricane Michael, a highly destructive, Category 5 hurricane. Some of these residents will never recover financially.

• What kinds of risks are excluded from your coverage? Most homeowners policies cover only the home itself and provide some coverage for personal possessions in the home. But according to Carter, one place to start is asking whether other structures on your property are covered. For example, many Florida single-family homes include decks. Is your deck actually covered by your homeowner’s policy? How about an equipment or toolshed – and the tools and equipment it contains? How about a backyard fence that might be blow down in a storm?

• Another question is about tree or debris removal. Policies usually cover the cost of removing a fallen tree from a home if the home is damaged, but trees or storm debris in a yard may not be covered. Carter’s advice: Call your insurance agent and go over these questions with the agent, with your policy in hand.

• If your area is hit with a major storm, it’s common for homes to suffer roof damage – and since we live in hot, humid Florida, water damage in your home often means mold damage will follow. If mold damage is caused by storm damage, it’s often covered. But mold damage caused by a failure to maintain a home often is not. It’s worth talking over with your insurance agent.

• If your policy excludes items that you think are important to cover, it’s possible to buy additional coverage to insure against those risks. Often, these additional insurance riders are relatively inexpensive – but not always. It’s worth doing the kitchen-table math to see how much additional coverages would cost and if they’re worth the expense.

• When you’re budgeting for storm-recovery costs, including insurance, don’t forget to include the cost of reconnecting your utilities. In many places, electric utilities charge a hefty fee for sending a crew to reconnect power to your home after repairs are concluded. These fees can easily run into the thousands of dollars. Your insurer may not cover this cost; if so, you may need to set money aside for this need.

To get additional ideas for your homeowners insurance review, take a look at the “Homeowners Insurance – A Toolkit for Consumers, (downloads as a pdf) prepared by the Florida Department of Financial services.