By Joe Carlucci
So let’s get one thing straight, insurance is not boring! Says the insurance guy who loves talking about insurance and was asked to write a blog about it. Now let’s get real – it is boring – BUT it is important to know what you’re buying and what may not be covered and included on your policy.
For guys like me who read through the entire insurance packet, I’m intrigued by the fine print. Because it matters. Reading this blog will allow you to bypass reading through that fine print and learn some interesting things you did not know! Keep in mind, the insurance industry is rapidly changing, so don’t use this as an excuse to not ask your agent questions.
In Florida, I bet you think the #1 claim insurance companies deal with is hurricanes. Right? (waiting for verbal answer). Okay so I will just tell you, it’s not even #2 or #3. THE most common claim is water damage. This is not the same as “flood damage.” Quick distinction: Water Damage is plumbing related; Flood Damage is water from outside coming in the house.
I like to give the worst-case scenario first, and in this case, it’s the most common as well. Every company has their own verbiage when it comes to water damage. Some are the same, some are slightly different…so as I said before, you still need to ask your agent about it. But it’s worth asking.
Now, what does the fine print say exactly about the #1 claim in insurance? “Constant or repeated seepage or leakage…occurs over a period of 14 days or more, whether hidden or not.”
Basically, that’s saying, water damage isn't covered after 14 days EVEN IF you didn’t “know” it was there. EVEN IF, it was hidden behind the walls or under the floors. Doesn’t matter. Not covered. Of course, the insurance company out of the goodness of their heart could pay the claim anyway – but that’s unlikely. Very unlikely!
Let’s continue on, shall we? I’ll give you a breather on reading paragraphs and give some short Q&A from our most common questions:
- Should I insure my house for the loan amount?
- No. Quick example: Let’s say a 2,500 square foot house located in downtown Jacksonville will cost $400,000 to rebuild. It would likely sell for $250,000 because of the location. So here, you will be insured for above the market value. Now, take the same 2,500 square foot house and put a sandy beach behind it, it will cost $2.5M – because of the…? (waiting for verbal answer again) ... the location! But we will not insure it for $2.5M – it will be still be insured for the cost to rebuild!
- Can I save money bundling my insurance?
- No. At least not in Florida. Homeowners Insurance is so nuanced in Florida that it diminishes the chances of your auto company also being more competitive on the home insurance. Silver lining? YES. You will still receive a discount on your auto policy if you are simply a “homeowner” – check your policy for it … you will likely see it on there, even if your home is not insured with your auto company.
- Will it cost more if I have a pool?
- No. And if you are buying a home with a fun looking diving board or slide – tell the kiddos sorry, it has to go! Most insurance companies won’t allow that.
Quick Facts:
- Liability coverage is included on your homeowner’s policy and it covers you anywhere, not just at home. Example, you’re in the grocery store pushing your cart down the aisle and you hit someone in the back of the heels. BAM! You’re sued. They can’t work, they can’t walk, and their brother is a really good attorney. Your homeowner’s insurance kicks in. Cool right? Well, it’s not cool that the “injured person” can’t walk but aren’t you glad you have coverage! Me too.
- Have a dog? Animal Liability – your sweet lab would never hurt anyone – correct? Sure…but you can and will still be sued for any incident dog related BUT you have to have the endorsement. Example, dog barks at a lady, in her own front yard, she get’s startled and falls down, gets hurt, sues you. Policy pays IF you have the endorsement. This was a real claim at my office. Insane.
- Hurricane comes through and rips off your Screened Enclosure – good thing you have insurance! MAYBE. You have to have….you guessed it – the endorsement.
- Everything depreciated right? Well, most stuff does. Speaking of “stuff” your policy needs to have “Replacement Cost” endorsement as well. Example, fire starts in the kitchen and then moves to the living room, all kitchen appliances and furniture is damaged, equating to about $65,000 worth of “stuff”. Well, if you want that full $65,000 to go buy new stuff, but you don’t have Replacement Cost, then the insurance company subtracts depreciation. They will find a similar couch on eBay or Facebook marketplace to price match. So that $65,000 turns into about $35,000 since buying used stuff is much cheaper!
Alright, we could keep going but a wise REALTOR once said, “When it comes to insurance questions, just call your agent.” And I fully endorse that statement!
About The Author
Joe Carlucci is a Jacksonville native, graduate of University of North Florida and an Agency Owner of Brightway Insurance in San Marco, with over 10 years of insurance experience.
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