3 Questions to Ask before You Purchase a Homeowner’s Insurance Policy
Owning a home is an integral part of the American Dream, but as you may already know, buying such an expensive asset comes with a multitude of financial considerations. If you’re like most Floridians, your home will be one of your most valuable assets, and it is important that you protect your financial future by purchasing homeowner’s insurance.
If you intend to have a mortgage, it is likely that your lender will require you to purchase homeowner’s insurance anyway. However, it is important to remember that not all insurance policies offer the same level of coverage, and if your insurance carrier is not financially stable, it may not be able to afford your repairs if multiple storms hit Florida in a single year – which has certainly happened in the past.
Even if you find a good insurance policy, you might face an uphill battle when it comes time to make a claim. If your homeowner’s insurance company has denied your claim or offered a low payout, contact Michael D. Leader.
Mr. Leader is an insurance attorney in Fort Lauderdale who understands the tactics that insurance companies use to cheat their claimants out of fair compensation. He will put that knowledge to work for you. Call 954-523-2020 today to schedule a free consultation at Leader & Leader P.A.
Let’s take a look at three questions you should ask before you commit to a homeowner’s insurance policy:
- Is the Insurance Company Financially Stable?
It is not uncommon for multiple hurricanes to hit the state of Florida in a single year. In 2004, for example, our state was decimated by Hurricanes Frances, Jeanne, Ivan, and Charley, which caused billions in damages.
As such, it is important that you find an insurance carrier that has the financial means to pay its claims. Insurers typically purchase reinsurance, which is essentially insurance for insurance companies, but even reinsurance is not always sufficient to cover all of the damages during a particularly destructive year. Ask the prospective insurance carrier about its reinsurance program, and compare the details to the reinsurance programs of other carriers.
Demotch, Inc. rates all homeowner’s insurance companies in Florida except for Citizens Property Insurance Corporation. Check the insurer’s Financial Stability Rating®. This is a useful metric when evaluating the financial stability of prospective insurers. Most competent agents will shop secure companies but you always should ask and double check! If the premium from one company is much lower than others, there is probably a reason why and you need to know.
- Does the Company Have a History of Cheating Its Policyholders?
Use the Internet to search for reviews about the prospective insurance company. The Web offers hundreds of reviews written by current and former policyholders of some of Florida’s most popular homeowner’s insurance companies including:
- Allstate;
- Amica;
- MetLife;
- Travelers; and
- State Farm.
- Tower Hill
- Universal Property & Casualty
- Florida Peninsula
- Edison Insurance
- Home Owner’s Choice
- People’s Trust
- What Exactly Does the Policy Cover?
Homeowner’s insurance policies are typically either “Named Peril” policies or “All Risks” policies. Even if you purchase an All Risks policy, bear in mind that it may not actually cover all types of damage. In fact, your policy can exclude just about any type of coverage as long as it is put in writing and is not mandatory coverage in the state of Florida. Many newer policies are excluding some or all water damage with the home owner not realizing it until they need to make a claim and don’t have coverage!
Unfortunately, even if you believe the damage to your home is covered by your policy, insurance companies are not always on the same page as their policyholders. If you think your insurer unfairly denied your claim or offered a low payout, contact Leader & Leader P.A.
Michael D. Leader will evaluate your case in a free initial consultation. Call 954-523-2020 to discuss your situation with an insurance claims lawyer in Fort Lauderdale.