Your home is likely the most significant investment you’ve made. Like any other asset, it needs protection. However, there are a few different types of insurance that you will need for your home. In this article, our Florida property damage lawyers explain three types of insurance that homeowners need.
What Is Insurance?
Before we jump into the types of insurance you need for your home, let’s cover the basics. Insurance is a form of risk management that protects you and your property from financial loss due to unexpected damages.
Essentially, you agree to make a monthly payment to an insurance company, called a premium. In return, the insurance company agrees to pay for any losses, as long as they fall under your plan.
There are many types of insurance, from auto and home insurance to disability and long-term care insurance. Each type covers a different set of circumstances, and there are various levels of coverage within each type.
Why Do You Need Insurance?
While the law doesn’t require you to pay for every type of insurance, carrying it has many benefits. Accidents and disasters happen all the time, and repairs can quickly become expensive. Without insurance, repairs or medical costs can send you into financial ruin.
Additionally, insurance is a way to transfer risk. Say, for example, that you’re buying a house. When you take out a mortgage, the bank wants to ensure that it protects its investment. Insurance preserves the investment and guarantees that your home is financially shielded from potential damage.
So, insurance is a way to protect you and your finances from serious loss since it ensures that you have the money to pay for the care you need. It also preserves any investment you make and protects you from potential risks.
What Types of Insurance Do You Need for Your Home?
When buying a home in Florida, you may need to invest in a few different types of insurance. Let’s work through three types you could benefit from and the coverage you may need.
Homeowners’ insurance is the first and most significant type of insurance you should invest in. This type of insurance has eight kinds of policies, each with varying levels of coverage. You should consider HO-1, HO-2, HO-3, or HO-5 policies when buying a home.
The HO-1 policy has the lowest coverage and only protects against the ten named perils. HO-2 and HO-3 policies are more extensive, with HO-3 being the most common policy for homeowners. HO-5 is the most comprehensive and recommended for high-net-worth properties in high-risk areas.
Whichever policy you choose for your Florida home, remember to check for any exclusions. Depending on your level of coverage, you may need to consider purchasing an additional plan to fill in the gaps.
While homeowners insurance tends to cover water damage, it does not cover damage from flooding. Flood damage stems from natural causes, like overflowing inland lakes, overflowing rivers or streams, surface runoff, mudslides, or extreme weather.
Since Florida is prone to storms, flood insurance is crucial – even if you live in an area with low-to-moderate risk. This type of insurance is especially critical for people living in flood zones, and banks may require it for a mortgage.
While you can get flood insurance from a private company, the FEMA-run National Flood Insurance Program provides fair coverage to most areas. You may benefit from investing in building coverage, contents coverage, or both.
The standard homeowners’ insurance policy covers windstorm damage in many parts of the country. However, in states like Florida that experience frequent tropical storms and hurricanes, standard coverage sometimes excludes damage from wind and hail.
Even though Florida doesn’t legally require windstorm insurance, mortgage lenders may expect you to carry it. It’s also a wise investment since powerful winds can cause expensive damage to your home and property.
The average windstorm insurance policy includes five types of coverage. It provides dwelling coverage, coverage for other structures not attached to your home, personal property coverage, loss of rent coverage, and loss of use coverage.
Speak to the Experts
If you’re buying a home in Florida, there are three types of insurance that you may need: homeowners insurance, flood insurance, and windstorm insurance. Each type will give you the coverage you need to protect your home in our state’s unpredictable weather.
Even though insurance is a crucial part of owning a home, dealing with insurance companies can quickly become complex. Here at Klotzman Property Damage Law, we advocate for fair compensation so you can properly restore and repair any damage.
Schedule your free case review today with our Hollywood property damage attorneys. When insurance companies fail, Klotzman Property Damage Law succeeds.