The Myth of Free Coverage in Florida

Insurance for homes in Florida is expensive.  That’s certainly true for policyholders and it is also true for insurance companies.  As we (and any other carrier) provide coverage for hurricanes, we need to be sure that we have adequate reinsurance and sufficient capital to handle the amount of coverage we are providing.  Insurance companies will refer to the amount of coverage provided as “TIV” or total insured values.  TIV for homeowners includes the cost to rebuild the main dwelling and any pools, guest houses, garages or other structures; the cost to replace all of the personal property in the home; and the cost to provide for reasonable additional living expenses in the event of a loss.

So why do insurance companies insist that they can provide coverage equal to 20% of your dwelling for other structures without a cost?  And why do they insist that additional living expenses are included at no extra cost?  They may be simplifying things by removing choice, but they certainly are asking some policyholders to buy coverage they don’t need.

If you have no other structures, don’t buy the coverage.  If you have three other homes and would not use a claim payment to live in a hotel after a hurricane, don’t buy the coverage for additional living expenses.  If this is your secondary residence, you may not need as much contents coverage as you would in your primary home.     

By offering tailored policies, we and our agents will always encourage members to buy the right amount of protection.  In some cases, this will mean increasing coverage.  Our agents will fit you with the right policy, not just an “apples to apples” comparison of an ill-suited policy.

We will never try to convince you that windstorm coverage in Florida does not carry a significant cost.