Protecting your home and finances with an adequate homeowner’s insurance policy is one of the most important ways to mitigate risk in the event of a damaging event.
However, not all insurance policies are created equally, and many homeowners are surprised by the fine print when it’s time to file a claim.
Understanding the details of your policy is essential to avoid costly surprises.
Here are some key things to watch out for in your homeowners insurance policy. If you have any questions, don’t hesitate to call our teamat KK&P Law Firm.
Coverage Limits
Your homeowner’s insurance policy comes with coverage limits, which dictate how much the insurer will pay in the event of a claim. These limits are broken down into several categories:
- Dwelling coverage – Protects the structure of your home.
- Personal property coverage – Covers your belongings, like furniture, electronics, and clothing.
- Liability coverage – Protects you if someone is injured on your property and decides to sue.
Make sure your coverage limits are sufficient to rebuild your home and replace your belongings in the event of a total loss. If your limits are too low, you may end up paying out-of-pocket to cover the difference.
Deductibles
A deductible is the amount you must pay out-of-pocket before your insurance kicks in. In Florida, policies often have special deductibles for hurricane or wind damage. Watch out for:
- Hurricane deductibles – These are typically higher than standard deductibles and are calculated as a percentage of your home’s insured value (usually 2%–5%). For a home insured at $300,000, a 5% deductible means you must pay $15,000 before your insurance covers hurricane-related damage.
- Named-storm deductibles – Similar to hurricane deductibles, but they apply to any named storm, not just hurricanes.
- Wind and Hail Deductibles – In some policies, wind and hail damage may have a separate deductible, which could apply even if it’s not a named storm.
Higher deductibles can lower your premium, but be sure you can afford to pay that amount in the event of a loss.
Exclusions
Many homeowners assume their insurance policy covers every type of damage. However, most policies have a long list of exclusions, meaning certain types of damage are not covered. Common exclusions include flood damage, mold, wear and tear, sinkholes, and others.
Matching Coverage
When repairs are needed, especially after roof or siding damage, insurers are supposed to restore your home to its pre-loss condition. However, some policies limit matching coverage. If your policy includes a matching limitation endorsement, the insurer may only pay a portion of the cost and leave you with mismatched repairs unless you pay the difference.
Water Damage Coverage
Water damage is one of the most common types of homeowners’ claims, but not all water damage is treated equally by insurers. Watch for:
- Gradual damage – Damage caused over time (e.g., a slow leak) is usually not covered, while sudden water damage (like a burst pipe) often is.
- Flooding – Flooding, including storm surge is not covered by standard homeowner’s insurance. For protection, you’ll need a separate flood insurance policy.
The list of things to watch out for in your homeowner’s insurance policy could go on forever. The important thing to know is that you should regularly review your policy and ask questions if you don’t understand something.
Not only does this educate you about coverage and exclusions, but it also can motivate you to shop around for better rates. If you have questions about your policy or need help with a claim, don’t hesitate to contact our experienced team Kandell, Kandell & Petrie today.
