Making sure that you are properly covered when it comes to insurance may seem complicated, but it’s extremely important to ensure that your home, auto, and possessions are appropriately covered in the case of accident or disaster. In the event of a serious incident, the last thing you want for your family is to be uninsured.
It’s very easy to make mistakes if you don’t fully understand your insurance policy and the process, but here are a few items to keep in mind as you purchase insurance.
- Make Sure Your Homeowners Insurance Covers the Cost to Rebuild, Not the Current Value
We all know that the home insurance can be pretty pricey, but we also know that the real estate market can cycle through highs and lows. This is why it’s important that you insure your home based on the cost of rebuilding your home, not on the current market value of the house. Think of it as insuring the “replacement value” of the home and not the sales value.
- Flood Insurance Isn’t Always Included in Your Policy
Many homeowners assume that flood insurance is included in homeowners insurance. This assumption is false. You will need to purchase separate flood insurance for your home either from the National Flood Insurance Program (NFIP) or through private companies. This is extremely important to remember in South Florida as storms and hurricanes can cause major flooding in certain areas. Keep in mind that even if we don’t experience a major hurricane, other factors can cause flooding to occur. It’s vital that homeowners have appropriate flood insurance to handle this type of damage.
- Sewer Failures May Not Be Covered by Your Homeowners or Flood Policy
When the toilet backs up or there are issues with the septic tanks or sewer, you will need additional coverage to handle these types of problems. Not only can they create a real mess, they can be quite expensive to repair. Home insurance and flood insurance may not cover all of the failures of the sewer, which is why it’s a good idea to inquire about a separate policy.
- Renters Insurance is The Only Way to Protect Your Belongings
Not purchasing renters insurance is a big mistake that many renters make. If you are renting a home and an accident or natural disaster destroys the property, your possessions will not be covered unless you have a comprehensive renters insurance plan. These plans may also offer liability protection if someone is injured in your home. Look into multi-policy discounts, as renters insurance can often be bundled with other types of insurance such as auto insurance.
- Florida’s Minimum Auto Insurance Policies Covers Less Than You May Think, Even if You’re Not at Fault in an Accident
Minimums are put in place just as that, a legal minimum. Florida requires all automobile owners to have to have a minimum type of insurance called Personal Injury Protection, also known as PIP or No Fault Insurance. However, the best bet is to make sure that you are fully covered with Property Damage Liability (PDL), Bodily Injury Liability (BIL), and Uninsured/Underinsured Motorist Coverage (UM). PDL will cover the costs of any damages you cause to someone else’s property. BIL will cover serious injury or death to others when you cause a crash. UM can protect you in the event that that you are not at fault in an accident and the negligent driver does not have BIL or is underinsured for the amount of bodily harm he/she has caused to you.
Purchasing the right type of insurance and the right coverage amount can be tricky, but it’s important to make sure that you are being responsible for your possessions and the lives of those you care about. In the event that you are liable for an accident or damages, your insurance will be a valuable tool.
Insurance Mistakes to Avoid | Insurance. (n.d.). Retrieved from https://consumerreports.org/cro/2013/05/4-big-insurance-mistakes-to-avoid/index.htm