Ways to Save on Your
Homeowners Insurance Policy
A replacement cost appraisal can save you hundreds or even thousands of dollars. Citizens Insurance Corp.,
as well as other insurance
companies accept appraisals (see below) and they must have been done
within the last 12 months. Also, make sure the appraiser is Florida Certified. HAC has a
appraisers listed below that are charging reduced rates due to the insurance
cost" is the amount needed to repair the damage or to rebuild the home to its
pre-loss condition. For insurance purposes, the replacement cost of a home is
NOT the market value of the home, its purchase price or the outstanding amount
of any mortgage loan. It does not include the value of the land, but is the cost
of rebuilding your home.
GET THREE INSURANCE QUOTES
Insurance agents use a what is called a
“Replacement Cost Estimator” along with county tax records to determine your
quote and if not done correctly can cost you thousands. HAC went to 14
different insurance agents for quotes for
2 different homes, a single story
block home and an elevated
2-story home, and found that most agents gave accurate quotes for a typical
Florida block home, but there were some discrepancies with screen rooms and/or
porches that could add more to the dwellings final replacement cost. With the
elevated 2-story home the different quotes were dramatic, ranging from $130,600
to $234,000. But by having an Replacement Cost Appraisal the agent must use
that appraisal figure.
OTHER WAYS TO SAVE ONCE YOU KNOW YOUR REPLACEMENT COST AND ARE WILLING TO TAKE
(WHICH IS BETTER THEN LOSING YOUR HOME BECAUSE YOU CAN NOT AFFORD YOUR
following savings are based on a
Dwelling coverage of $156,500 and a Personal Property coverage
(contents) of $78,250 (50%) with Citizens homeowners insurance:
You could choose “No” for Replacement
Cost Contents (then you will only get the depreciated amount for your
contents). A savings of $440.
You could increase your Deductibles
on All Other Perils and Hurricane (if your mortgage company will
increasing All Other Perils from $1000 to $2500,
By increasing Hurricane from 2% to 5%, save $264.
(You can now increase your deductible to 10%)
Total savings on the above: $1173.
September 1, 2007 for new policies, and
October 1, 2007 for renewing polices
you will be able to "Opt-out" of
(if your mortgage
company will let you). Savings
will vary from county to county. Pasco and Hernando are the only
counties that you must "Opt-in" to have sinkhole coverage. To
not have Sinkhole Coverage is very risky in certain areas of
Florida, especially Pasco and Hernando counties. However, every
homeowners policy will still be covered for "Catastrophic Ground Cover
Collapse". This means that if your home becomes "Uninhabitable" (meaning
you must move out) by county standards you will be covered.
See HAC's Sinkhole page for more details.
Reduce Personal Property (contents)
coverage to 25% of your Dwelling coverage (Citizens allows you to do this
but some agents are not aware that you can), you will then not be eligible
to get full replacement cost. The saving on your policy's premium would be very minimal by
choosing this, only a $39 savings.
On your policy you will
see coverage for Other Structures, which is always 10% of the
Dwelling coverage. Many homeowners are confused about this coverage
when they have no "other structures" on their property. This coverage is
automatically applied to the policy. It provides
coverage for structures not attached to the dwelling, such a garage or
fence. You can choose to increase this coverage if needed.
You may be able to drop this coverage in the
future. Savings yet to be determined.
MORE INFORMATION YOU SHOULD KNOW
Having a hip roof can save you hundreds on your
policy under Windstorm
Mitigation. A gable roof is more susceptible to wind damage,
thus no savings.
Having a new roof or newer roof, and you have proof that it was done by
a licensed contractor, may give you a discount.
If you have a bathroom that
has a sink, toilet and shower without a tub that is a 3/4 bath, not a
full bathroom, and could save you over $25 on your policy's premium.
Make sure an Agent doesn’t add a
No Prior Coverage
if you already have an insurance policy (whether it’s Citizens or another
Ways to Save Flyer (PDF)
REPLACEMENT COST APPRAISALS
Here are the two most often used
appraisals for determining replacement cost
(Total Estimate of Cost New) for homeowners insurance.
Full/URAR Uniform Residential Appraisal Report,
(Fannie Mae Form 1004
cost can range from $325 to $400. In this type of appraisal the appraiser takes
interior photos of the home, and can document any extra features such as a
Jacuzzi tub or granite countertops. County records are used for square footage
and other details.
Exterior-Only Inspection Residential Appraisal Report,
view form), cost can
range from $150 to $275.
this type of appraisal the appraiser speaks with the homeowner, usually over the
phone, about the interior features of the home. Questions about types of
flooring, if there is a dishwasher, garbage disposal, etc. Exterior photos of
the home are taken. County records are used for square footage and other
details. This is the appraisal type that State Farm, Allstate, and many other
insurance companies accept. Even Fannie Mae accepts this type of appraisal (see
To all insurance agents: Citizens accepts the Exterior-Only appraisal
which is much more affordable. In fact, the Exterior-Only appraisal is
even more detailed then the "Replacement Cost Estimator" that Citizens
uses to determine replacement cost.
03/15/07, From Andrew
Martinez, Director of Public Outreach and Education at Citizens Property
Phone - (850) 513-3711
Cell - (850) 528-2779
Fax - (850) 513-0375
"We will accept any
appraisal from a Florida certified appraiser as long as the appraisal
reflects the cost of replacing the building. We have issued and posted to
our web site several bulletins, (view
bulletin) to help
our 8,300 agents better understand the four ways we allow for determining
the the amount that should be used for replacement cost. Once more we will
accept any appraisal for replacement cost from a Florida certified
Here are a few appraisers in
the West Pasco area that were recommended to HAC and are giving discounted
rates (as low as $150) for appraisals due to the insurance crisis. (Rates for appraisals can run
as high as $400 or more).
When you call tell them you need
a replacement cost appraisal for homeowners insurance. And remember to make sure the appraiser is Florida
forget to mention HAC)
Spring Hill, Fl 34608
ARPL Appraisal Services
Port Richey, Fl 34668
Cote Appraisals Inc.
Hudson, Fl 34667
Jay Appraisals Inc.
Port Richey, Fl 34668
Check the Yellow Pages for your
does not indorse any one appraiser and suggests everyone to shop around)
Appraisal Flyer (PDF)
Fannie Mae's Revised Appraisal and
Property Report Forms
(Forms Dated March 2005 for Appraisals Performed On/After 11/1/05)
Frequently Asked Questions:
12. How can appraisers assist
lenders in determining an appropriate level of hazard insurance coverage for
loans to be delivered to Fannie Mae?
Fannie Mae requires property
insurance for first mortgages that protects against loss or damage from fire and
other hazards. The hazard insurance coverage should provide for claims to be
settled on a replacement cost basis. We prefer lenders to rely on a replacement
cost estimate for the property that is made by the insurer. However, we are
generally hearing from insurers that although they may provide some guidance
about what the replacement cost should be, they consider it to be the
responsibility of the consumer to determine their level of coverage. The fact
that insurers appear to be reluctant to determine the replacement cost for a
dwelling has become even more significant due to the general lack of guaranteed
replacement cost policy endorsements. In addition, some states prohibit lenders
from requiring levels of hazard insurance that exceeds replacement cost for the
Lenders that choose to rely on
the appraiser to provide a replacement cost estimate to determine the level of
hazard insurance coverage required for a one-unit property should request that
the appraiser provide the information in the “Cost Approach To Value” part of
either the revised Uniform Residential Appraisal Report (Fannie Mae Form
1004 dated March 2005) or the Exterior-Only Inspection Residential Appraisal
Report (Fannie Mae Form 2055 dated March 2005) or to report the
information as an attachment to the appraisal report form. In such cases,
lenders should rely on the appraiser’s estimate of the replacement cost of the
improvements, which is reported as the “Total Estimate of Cost New” on the
This estimate does not include
any form of depreciation or obsolescence. It is not appropriate for the lender
simply to subtract the reported site or land value from the appraised value of
the property to make that determination because that result is an estimate of
the depreciated value of the improvements, not an estimate of their replacement