Tips For Shopping For Homeowners Insurance
Check for Premium Discounts
Multiple Policy or Bundling
Discount for having multiple policies with the
same insurance company (such as homeowners
insurance and life insurance) or bundling several
types of insurance into one policy with an
insurance company. Bundling is commonly done
with homeowners and auto insurance.
Loyalty
Discount for being a policyholder with the same
insurance company for a specified length of
time.
Claims-Free
Discount for not filing a claim within a specific
length of time.
Home Improvement
Discount for certain upgrades to your home
such as improvements to your electrical or
plumbing system.
Hurricane Loss Mitigation
Insurance companies are required to offer
discounts for making improvements to your
home that make it more resistant to storm
damage. Improvements such as specific roof
coverings or connections; shutters; etc. may
result in you receiving a premium discount.
Learn more about premium discounts that may be available from a wind mitigation inspection in the Department's consumer education guide.
Roof Age
Discount for your roof can vary from company
to company. This discount will depend on the
age, condition, and the type of roof. Typically,
this discount may only apply to roofs less than
10 years old.
Roof Deductible
Insurance companies are required to offer a
premium credit or discount if your policy has a
roof deductible. You have the option to reject
having a roof deductible and not receiving the
premium credit or discount.
Home in a Gated Community
Discount because the insured residence is located
in a gated community
Full Payment
Discount for paying your policy premium in full
in one annual payment as opposed to paying it
in monthly or semi-annual payments.
Security Alarm System
Discount for having an alarm or monitoring
system installed in your home.
Fire Alarm System
Discount for having a fire alarm system
installed in your home. Some insurance
companies may include smoke detectors in
their Fire Alarm System Discount or may offer a
separate discount for smoke detectors. Ask your
insurance agent or insurance company about
potential discounts for smoke detectors.
Consider Deductible Amounts
Your deductible is the amount you are responsible for if you incur damage and file a claim. Typically, you will have two, separate deductibles: an all perils deductible and a hurricane deductible. Your policy may also include additional/optional deductibles for roof, sinkhole or water damage.
Selecting a higher deductible may result in a lower premium. That also means that you will have to put forth more funds when you file a claim. It is important to carefully weigh the cost savings of having a higher deductible with whether you can afford to pay the deductible if you need to file a claim.
Additionally, multiple types of optional deductibles may result in a lower policy premium. Review the policy options to determine whether the lower premium justifies having multiple types of optional deductibles.
Homeowners insurance may have five different types of deductibles. Be sure to discuss the deductible amounts with your insurance agent or insurance company so you are aware of your deductible amount for damages from a hurricane, sinkhole, or other disasters.
All Perils Deductible
Hurricane Deductible
This deductible is applied when the covered damage is caused by a storm that has been declared a named hurricane by the National Weather Service.
Roof Deductible
This optional deductible is applied when you file a claim for damages to your roof. This deductible does not apply if the damage was caused by a hurricane, a tree or other hazard that damages the roof and punctures the roof deck, or a total loss caused by a covered incident. When a roof deductible is applied, no other deductibles under the policy may be applied.
Sinkhole Deductible
This deductible is applied when the covered damage is caused by a sinkhole, if sinkhole coverage is included in your policy.
Water Deductible
Your insurance policy may include a deductible for non-weather-related water claims. These types of claims include damage to your home by water that is not due to a weather-related event, such as the accidental discharge or overflow of water from a pipe, plumbing system, or household appliance.
Understand Replacement Cost vs. Actual Cost Value
Replacement Cost Policy:
Will pay the cost to replace the item at the present time, regardless of the decreased value.
Actual Cash Value Policy:
Will pay you the cost to replace the item minus the decreased value of the item.
Replacement Cost vs. Actual Cost Value Example:
The refrigerator that you purchased for $3,000 five years ago was damaged from a lightning strike.
Your insurance company determines that a refrigerator has a useful life of 10 years, and the same refrigerator today would cost $3,500.
Your damaged refrigerator has 50% (5 years) of its useful life remaining since you bought it 5 years ago.
| Original Purchase Price | Useful Life of Product | Useful Life Remaining | Current Market Price | Insurance Payout | |
| Replacement Cost | $3,000 | N/A | N/A | $3,500 | $3,500 |
| Actual Cash Value | $3,000 | 10 Years | 5 Years (50%) | N/A | $1,500 |
If your policy is based on Replacement Cost, your insurance company will pay you the amount needed to replace your damaged refrigerator with a similar refrigerator today. The insurance company determined a similar refrigerator would cost $3,500 in today’s market.
With Replacement Cost, your insurance company would pay you $3,500 to replace your damaged refrigerator.
To calculate the Actual Cash Value, you would receive from your insurance company to replace the damaged refrigerator, you would multiply the $3,000 original purchase price by 50% (the useful life remaining of your refrigerator).
Your insurance company would pay you an Actual Cash Value of $1,500 to replace your damaged refrigerator ($3,000 x 50% = $1,500)
Replacement Cost: $3,500
Cost to Replace in Today's Market
Actual Cash Value Policy: $1,500
Original Price x Useful Life Remaining
Contact Your ICA
Florida's Insurance Consumer Advocate
Office of the Insurance Consumer Advocate
200 East Gaines Street, Tallahassee, FL 32399
Phone: (850) 413-5923
Email: YourFLVoice@MyFloridaCFO.com
