Affordable Florida Homeowners Insurance Policy
Consider DP1 rather than DP3
DP1 and DP3, are the two types of basic policy available to rental homeowners. The selection of cover then determines the policy issued and to some degree the insurer. DP means dwelling policy.
DP1 – covers losses at Actual Cash Value (ACV) rather than the more favorable Replacement Cost (RC). The basic difference is depreciation. ACV takes into account the annual depreciation … RC replaces the item with new. The DP1 covers the following specific perils: Fire, lightning, explosion, wind & hail, smoke, aircraft, riot & looting, vandalism, sprinkler leakage, sinkhole collapse, volcano/lava.
DP3 – adds everything else to the perils covered in a DP1 unless it is specifically excluded … like earthquake and flood, in Florida. A DP3 covers a loss at RC, as opposed to ACV. In brief, the DP3 is a far more comprehensive policy, but almost twice as expensive!
DP1 is cheaper than DP3 style insurance. DP3 may give coverage for perils that is not needed here, such as the roof collapsing from accumulated snow. It did snow here in the St Petersburg / Tampa Bay area back in the 60s so maybe you need it. DP1 is usually used when the property is being rented to someone else. A DP 2 is a replacement cost policy but has several endorsements that reduces the payout.
See the Insurance Broker's page for a couple of tips from an insurance agent as to how he is trying to keep his building insurance down. The insurance strategy he is using is titled Insurance Broker's Path To Cheaper Homeowner Insurance and is half way down the page. He was taking advantage of his mortgage not being specific enough about the type of insurance required and also the fact his building can be either residential or commercial. If you think homeowner's insurance is expensive you should see the hits that commercial property owners are preparing to take.
Have An Insurance Inspection Of Your Home
An inspector can certify that your roof is up to code, and can give you a discount for having plywood shutters. Apparently there was very little difference in the the
discount you receive for having hurricane shutters versus plywood.
Inflation Option
Some insurance companies may have an inflation option built into the policy so that you get more coverage each year. So, if you have a $150000 house and they believe that inflation is 10%, then they raise your replacement value 15000.00 from last year.
Your agent may have chosen the "inflation option" on the policy. You now need to write a letter to Citizens to ask them to remove it. Of course it means the agent gets more commission too if that option is in there.
Keep Tabs On Your Escrow Company
My insurance agent told me that the insurance companies extend the courtesy of a 90 day grace period to the escrowing lender to get the premium in. She has been wrong before, so try to make sure that your escrow company pays your bills on time.
It is wonderful how these big corporations understand their mutual inefficiencies. If only the humble individual could be held to the same lax standard.
Don't Make Claims
Insurance companies have a tendency to raise premiums on people who make claims. So unfair as it seems, if you have a small claim, take the loss yourself. Listen to Pamela Chase's experience:
I lost my home to hurricane Charlie a complete loss I went to Foremost because I am an AARP member but Foremost will not insure my new home that is a Palm Harbor 2005 well built mobile home because I had a complete loss in 2004. I feel we are being
discriminated because of a peril that was beyond our control. I am a better risk to them than the older homes they are insuring. I feel something needs to be done to help the people in Florida to get their homes insured at a decent rate and not shut down because of prior claims.
Own A Newer Home
Here is an interesting quote: "Homes built in the '70s, '80s and early '90s are more risky," Hammond said. "They tend not to perform as well in a storm." Some older homes and those built under the stricter building codes after Hurricane Andrew are sturdier, he said.
That was from Dale Hammond, president of the new HomeWise Insurance Co. in Pinellas Park, in the St Petersburg Times of May 21, 2006. I heard the same piece of information from one of my former Florida state representatives, Frank Farkas. That sort of sticks in my mind because Citizens Property Insurance has the temerity to inflict an extra premium on the owners of homes older than fifty years. Even though they may be less prone to windstorm damage!
50 years is totally arbitrary of course. A Florida home built in 1958 that is considered sturdy now, I believe will attract this extra premium in 2008, and as the years pass more homes will fall into this age group, boosting Citizens' piggy bank even more.
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