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Renters' insurance covers you against financial loss if your personal property (contents) is damaged or destroyed from a covered peril. A peril is something that causes or may cause injury, loss, or destruction, such as a fire, tornado, or hurricane. A list of normally covered perils is included under the “coverage” section. In some cases flood coverage may be added by endorsement to your renter’s policy. If your company doesn’t provide flood coverage for your personal property, a separate policy can be purchased. If you are interested in coverage for flood, you should consult your agent.

Although we have discussed some of the coverage available in this overview, insurance contracts vary between insurance companies so you should always review the coverage provided in your own policy to determine whether you have the coverage you need. It’s too late to obtain additional coverage after a loss has occurred.

Coverage

Personal Property/Coverage C: Your personal property is normally covered anywhere in the world; unless, the property is located at another residence owned by you and not insured. If your property is located in another residence owned by you, but not insured, the policy may limit the amount of coverage provided to 10% of the total coverage. Most policies also include limited coverage for improvements or betterments made to the residence by the insured.

There are special limits on certain items such as jewelry, guns, furs, money, cameras, art or antiques, etc. You should review this list found in your policy and speak to your agent about additional coverage if needed.

Coverage is typically issued to cover “named perils” which may include fire or lightning, windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, vandalism or malicious mischief, theft, volcanic eruption, falling objects, weight of ice, snow or sleet, accidental discharge or overflow of water or steam, tearing, cracking, burning or bulging, freezing, sudden and accidental damage from artificially generated electrical current, and Catastrophic Ground Cover Collapse. (Sinkhole coverage “may” be purchased by paying an additional premium.)

Coverage can be obtained that settles claims based on the “actual cash value” of the personal property at the time of loss or that settles claims on a “replacement cost” basis. This is something you should discuss with your agent.

  • Actual cash value means the cost to replace an item less depreciation. In other words, if damage occurred to a television that had a 10-year life expectancy and you owned the television for 5 years, notwithstanding any deductible, the settlement would be 50% of the cost to replace the television because you had already used 50% of the life expectancy. Your loss consisted of the remaining 50%.

  • Replacement cost pays for the cost of replacing the damaged or destroyed item. In the example above, with replacement cost coverage, you could replace the damaged television with a new one without a deduction for depreciation as long as the new one is the same like, kind, and quality of the damaged one. If you have replacement cost coverage but elect not to replace a damaged or destroyed item, the insurance company will only pay the actual cash value for the item.

Loss of Use/ Coverage D: Loss of use provides coverage for additional living expenses and/or fair rental value.

“Additional living expense” covers the excess expenses of an insured that must live elsewhere due to a loss to the residence where their insured personal property is located. In many instances, coverage is provided if a civil authority prohibits you from use of the “residence premises” as a result of direct damage to neighboring premises by a covered peril. Additional living expense pays only reasonable “excess” expenses until the property is habitable.

As an example, let’s say your family normally spends $200.00 a week for groceries. As a result of the damage to your kitchen, you can no longer cook so all your meals are eaten out. The cost of eating out for your family averaged $400.00 a week. The insurance company should pay the difference between the amount you normally spent for groceries and the amount it cost to eat out which is $200.00.

The additional living expense must normally be incurred prior to reimbursement. Obtaining reimbursement for additional living expenses is always contingent on providing the insurance company with receipts. Be sure to save all receipts, regardless of the amount.

Payment will be for the shortest time required to repair or replace the damage or, if you permanently relocate, the shortest time required for your household to settle elsewhere.

“Fair Rental Value” provides coverage for the fair rental value of the “residence premises” rented to others or held for rental by you when it is made unfit to live in due to a covered loss. Please note, the insurance company will not reimburse expenses that do not continue while it is not fit to live in.

Payment will be for the shortest time required to repair or replace the residence premises.

Liability/Coverage E: Coverage E covers the insured for amounts they become legally liable to pay due to bodily injury or property damage of others, including the cost of defense. The insurance company’s duty to settle or defend ends when the policy limit is exhausted.

Medical Payments to Others/Coverage F: Coverage F covers medical and other related expenses for members of the public injured through personal activities of an insured, without regard to the insured's legal liability.

Rates

Rental Insurance Rates are developed using several factors:

  • The location of the property: The city, county, zip code can be used to establish the territory.

  • The amount of coverage selected.

  • The fire protection class: The rating of the fire department in that territory. The ratings range from 1-10 established by the Insurance Services Office. A rating of Class 1 represents exemplary fire protection, and Class 10 indicates that the area’s fire-suppression program does not meet minimum criteria.

  • The construction of the dwelling such as wood frame, concrete block, brick, etc. Companies charge different premiums based on the fire resistance of the construction material.

  • Some insurance companies charge a higher premium according to the age of the home.

  • Some insurance companies charge a higher premium if you didn’t consistently maintain prior insurance coverage.

  • After the base rate is determined, other rating factors are applied to determine individual surcharges and credits. Also, assessments currently due are added to the base rate to determine the final rate.

Underwriting

Underwriting guidelines vary between insurance companies. However, below are a few of the most common things an insurance company reviews when determining whether to insure a new applicant or how much to charge. They may use this same underwriting criteria to determine whether or not to offer a renewal policy.

The insurance company may consider the age of the home, roof, plumbing, electrical wiring or the heat and air. Even though a renter’s policy does not provide coverage for the structure itself, with the exception of improvements or betterments made by the insured, these factors can contribute to personal property losses.

They consider the condition and location of the residence and who occupies it.
They may refuse to insure an individual that owns certain animals. Most insurance companies believe the presence of certain animals on the premises increases liability risk.

The credit and loss history of the applicant is also considered. If the insurance company does make an underwriting decision based on adverse information contained on a credit report, they must furnish the insured with a copy of the report or provide the name, address, and telephone number of the reporting agency.

If an insurance company refuses to insure an applicant or if it decides to non-renew or cancel an existing renter’s policy, it must provide advance notice to the insured and provide the specific reason for their decision. This is discussed further in the cancellation - nonrenewal information section.

Cancellation

Cancellation means the termination of an insurance policy before its normal expiration date (in other words, mid-term).

Insurance companies must provide a specific reason for cancellation in their notice to the insured. Depending on the situation, the following advance notices must be provided to the insured:

A 10-day advance notice if the premium is not paid;

During the first 90 days of the policy period, insurance companies must provide a 20-day advance notice with certain exceptions, except for nonpayment of premium;

After the first 90 days of the policy period, the insurance company must provide a 120-day advance notice but the policy can only be cancelled for misrepresentation, non-payment of premium, failure to comply with underwriting requirements, a substantial change in the risk, or if all policies in a given class of insureds are being cancelled.

Exception: There is one exception to the notice requirements listed above. Insurance companies may cancel policies with 45-days advance notice if the Office of Insurance Regulation (OIR) determines that the early cancellation of the policies is necessary to protect the best interests of the public or policyholders. The OIR must also approve the insurance company’s plan for early cancellation or nonrenewal.

Cancellation Limitations

The following limitations are placed on cancellations of renter’s policies:

Act of God Claims: Only under certain circumstances is it permissible for claims on renter’s insurance policies that are the result of an "Act of God", to be cited as the reason for cancellation. The insurance company must demonstrate, by claims frequency or otherwise, that the insured has failed to take action reasonably necessary, as requested by the insurance company, to prevent recurrence of damage to the insured property. However, the insurance company may raise a deductible at renewal.

Daycare on Premises: With exceptions, Florida law prevents an insurance company from canceling a renter’s insurance policy solely on the basis of operating a daycare business at the residence. The insurance company can cancel a policy if one or more of the following conditions exist:

  • The insured does not carry a separate liability policy or endorsement at all times that provides liability coverage for the daycare home operations;

  • The insured fails to comply with the daycare licensure and registration requirement; or

  • The insurance company discovers any willful or grossly negligent acts or omissions, or any violations of state laws or regulations establishing safety standards for daycare homes by the insured, or by his/her representatives which materially increase any of the risks insured.

  • The insured cares for more children than allowed by law;

During a Hurricane: If a cancellation is scheduled to take place during a hurricane, the insurance company is required to extend coverage until the end of the duration of the hurricane. However, the insurance company may charge the “current” premium rate (the rate then in effect) for the extended coverage.

Pending/Open Claim or Existing Damage: Currently, there are no laws that prohibit an insurance company from cancelling a renter’s policy if the insured has a pending claim except upon a declaration of an emergency and the filing of an order by the Commissioner of Insurance Regulation.

Premium Refund Timeframe: When a renter’s policy is cancelled by the insurance company or the insured, any unearned premium must be returned to the insured within 15 working days after the effective date of the cancellation. If the premium is financed with a Premium Finance Company, the unearned premium must be returned to the Premium Finance Company first to pay off the loan. Any overpayment will be returned to the insured.

Water Damage Claim: A single claim on a renter’s insurance policy which is the result of water damage may not be used as the sole reason for cancellation unless the insurance company can demonstrate that the insured failed to take action reasonably requested by the insurance company to prevent a future similar occurrence of damage to the insured property.

Nonrenewal

A nonrenewal is the termination of an insurance policy at its normal expiration date.

Insurance companies must provide advance notice of 120 days to the first named insured if it decides not to continue a policy past its original expiration date. It must also provide the specific reason for the nonrenewal to the first named insured if it decides not to continue a policy past its original expiration date. In other words, if the insurance company decides the risk no longer meets their underwriting guidelines due to the age of the residence, it must state in the notice - the age of the residence no longer meets the insurance company’s guidelines.

Nonrenewal Limitations

The following limitations are placed on nonrenewals of renter’s policies:

Act of God Claims: Only under certain circumstances is it permissible for claims on renter’s insurance policies that are the result of an "Act of God", to be cited as the reason for nonrenewal. The insurance company must demonstrate, by claims frequency or otherwise, that the insured has failed to take action reasonably necessary, as requested by the insurance company, to prevent recurrence of damage to the insured property. However, the insurance company may increase a deductible at renewal due to act of God claims.

Credit Report/Score: Insurance companies cannot non-renew a renter’s policy solely based on information from a credit report, for having no credit history, or for having an adverse credit history due to medical bills. Also, if the insurance company refuses to insure or nonrenews a policy due to adverse information contained on a credit report, they must furnish the insured with a copy of the report or provide the name, address, and telephone number of the reporting agency.

Daycare on Premises: With exceptions, Florida law prevents an insurance company from nonrenewing a renter’s insurance policy solely on the basis of operating a daycare business at the residence. Nonrenewal by the insurance company is acceptable if one or more of the following conditions occur:

  • The insured cares for more children than allowed by law;

  • The insured does not carry a separate liability policy or endorsement at all times that provides liability coverage for the daycare home operations;

  • The insured fails to comply with the daycare licensure and registration requirements; or

  • The insurance company discovers any willful or grossly negligent acts or omissions, or any violations of state laws or regulations establishing safety standards for daycare homes by the insured, or by his/her representatives which materially increase any of the risks insured.

During a Hurricane: If a nonrenewal is scheduled to take place during a hurricane, the insurance company is required to extend coverage until the end of the duration of the hurricane. However, the insurance company may charge the “current” premium rate (the rate then in effect) for the extended coverage.

Pending/Open Claim or Existing Damage: Currently, there are no laws that prohibit an insurance company from cancelling a renter’s policy if the insured has a pending claim except upon a declaration of an emergency and the filing of an order by the Commissioner of Insurance Regulation.

Single Water Damage Claim: A single claim on a renter’s insurance policy which is the result of water damage may not be used as the sole reason for non-renewal unless the insurance company can demonstrate that the insured failed to take action reasonably requested by the insurance company to prevent a future similar occurrence of damage to the insured property.

"Policy Change" Notice Requirements

Section 627.43141, Florida Statutes, provides that a homeowner’s policy (including renters) renewal may contain a change in policy terms. If a renewal contains such a change, the insurance company must give the named insured written notice of the change which may be included with the renewal premium notice required by F.S.627.4133 or sent separately within the same timeframe. The insurance company must also provide a sample copy of the notice to the named insured’s insurance agent before or at the same time the notice is provided to the named insured. The notice must be entitled “Notice of Change in Policy Terms.”

A renewal policy, which includes the addition of optional coverage that increases the premium to a policyholder, may not use the “Notice of Change in Policy Terms” to add the optional coverage to the policy unless the policyholder affirmatively indicates to the insurance company or agent that they approve the addition of the optional coverage. Optional coverage is defined as the addition of new insurance coverage that has not previously been requested or approved by the policyholder.

Although not required, proof of mailing or registered mailing through the US Postal Service of the “Notice of Change in Policy Terms” to the named insured at the address shown in the policy is sufficient proof of notice.

Receipt of the premium payment for the renewal policy by the insurance company is deemed to be acceptance of the new policy terms by the named insured.

If an insurance company fails to provide the required notice, the original terms remain in effect until the next renewal and the proper notice is given, or until the effective date of replacement coverage obtained by the named insured, whichever occurs first.

Please note: “Change in Policy Terms” means the modification, addition, or deletion of any term, coverage, duty, or condition from the previous policy. The correction of typographical or scrivener’s errors or the application of mandated legislative changes is not a change in policy terms.

The intent of this law is to allow an insurance company to make a change in policy terms without nonrenewing policyholders they wish to continue insuring. In addition, it alleviates concern and confusion to the policyholder caused by the required policy nonrenewal if the insurance company intends to renew the insurance policy, but the new policy contains a change in policy terms.

Common Claim Concerns

Proof of Ownership: A very common claim concern involving a renter’s policy is proving ownership and how much was paid for damaged or destroyed personal property. It is very important to keep receipts of large items. It is also important to take photos or videos of the personal property in your residence. Remember, it is the responsibility of the insured to provide proof of ownership.Keep an inventory, including serial numbers when available. You should also maintain copies of inventories and other documents in a location away from the residence premises. Make duplicate copies and upload them to a hard drive stored at another location.

Insured’s duties after a loss: When a loss occurs, the insured should promptly notify their agent or insurance company, and review the Conditions, Duties after a Loss Section of their policy. There are separate conditions for Section 1 (Property Coverage) and Section 2 (Liability Coverage) of the contract. If more than one insurance policy covers the occurrence, all insurers should be notified.

The insured has a responsibility to mitigate damages to their property, or protect the property from further damage. The insured should make reasonable temporary repairs and keep accurate records and receipts of those repairs. It is always a good idea to take photos of the damage prior to making temporary repairs, if possible.

The insured should also compile an inventory of all damaged personal property. The inventory should include the date of purchase, quantity, description, value, and the amount paid for each item. The insured may be asked to produce receipts, bills, and any other related documents to justify the amounts provided.

The insured must cooperate with the company in the investigation of the claim. The insured and/or other parties may be asked to provide a recorded statement or an examination under oath.

If the occurrence is related to a liability issue, the insured should forward all notices, demands, summons, or other process documents relating to the “occurrence” to the insurance company immediately upon receipt.

Insurance Company’s duty to acknowledge claim communications: An insurance company must respond to any communication with respect to a claim within 14 calendar days, unless payment is made within that period of time or unless the failure to acknowledge is caused by factors beyond the company’s control. A communication made by an agent or another employee of a company shall constitute communication to or by the company. The communication can be made in writing, verbally, or any other form.

Within 10 working days after the company receives proof of loss statements, the company must begin its investigation of a claim unless the failure to investigate is caused by factors beyond the control of the company.

Please note: “Beyond the control” was intended to include physical incapability caused by natural disasters. This could be very broad, including delays due to lack of adjusters or engineering firms needed to analyze damages. Whether a factor was beyond the control of the insurer will have to be determined on a case-by-case basis.

Notice of Windstorm or Hurricane Claim: The time period an initial, supplemental or reopened claim can be presented to an insurer under a renter’s insurance policy providing coverage for windstorm or hurricane is limited. Under current Florida law, these claims are barred unless notice was given to the insurance company in accordance with the terms of the policy and within 3 years after the hurricane first made landfall or the windstorm caused the covered damage.

Timeframe for Payment of Claim: Within 90 days after a company receives notice of a new, reopened or supplemental renter’s insurance claim, the company must pay or deny the claim. If the settlement amount is contested, the company should pay all uncontested amounts within the 90-day timeframe unless the failure to pay the claim or the uncontested amount is caused by factors beyond the control of the company. Any payment (portion or entire claim) paid more than 90 days after the company receives notice of the claim, or paid more than 15 days after there are no longer factors beyond the control of the company, whichever is later, will bear interest according to Section 55.03, Florida Statutes.

Please note: “Beyond the control” was meant to include physical incapability caused by natural disasters. This could be very broad, including delays due to lack of adjusters or engineering firms needed to analyze damages. Whether a factor was beyond the control of the insurer will have to be determined on a case-by-case basis.

Renters' Insurance Tips

Verify before you buy!!!! Contact us to verify the license of the agent and the insurance company before you sign an application for a policy.

Review your coverage amount on a regular basis! You may purchase additional items during the year or make improvements or betterments to the residence without realizing the need to increase the amount of coverage you have. Make it a general practice to review your amount of coverage at each renewal to make sure limits are sufficient.

Read your policy carefully! Insurance policies differ between insurance companies so you must review your own contract. Insurance policies do not cover everything, read the exclusions. Also, there are limitations on certain types of personal property, such as but not limited to antiques, firearms, jewelry, furs and electronics, including computers and their equipment. In most instances, additional coverage may be purchased for these items. Consult your agent about additional coverage.

Keep a copy of your important documents in another location! In the event your home is totally destroyed, you would have copies of all your important documents including receipts you may need to settle a claim with your insurance company.

Contact Us or File a Complaint

Should you need additional information, you may speak with an insurance specialist between the hours of 8am–5:00pm at one of the telephone numbers listed below:

1-877-MY-FL-CFO (1-877-693-5236)

Out of State Callers: (850) 413-3089

You can also contact us for assistance anytime by email at Consumer.Services@MyFloridaCFO.com. or file a complaint through our “Consumer Help Online” website.

 

For more information on renters’ insurance, view the educational video and toolkit below. The resources provide information to assist you with insuring your personal property and to assist you if you have a covered loss.