Best Insurance Blog in Ft. Lauderdale, Boca Raton, Pompano Beach

The home remodeling business is booming, more than one-in-three American homeowners are remodeling or planning to do so in the next year. But during this fix-up frenzy, many homeowners will be exposed to serious financial risk.

One-in-four home remodeling projects increase the value of a home by more than 25%. But too few consumers consider increasing their homeowner's insurance limits to reflect their home's increased replacement value, this means you could be seriously underinsured.

In fact, according to a recent survey, 60% of homeowners who recently made major structural changes to their homes-such as bathroom or kitchen remodels, room additions, new decks or patios - have not updated their homeowner's policies. Some 75% who have

plans to remodel in the near future, have not thought about updating their policy.

Most insurance companies require homeowners to insure their home to a minimum of 80% of its replacement value to be eligible for full coverage. If coverage falls below that level and the homeowner experiences a loss, they will be penalized with a partial settlement - often thousands of dollars less than the actual cost to replace the damaged property. A homeowner with a total loss, an outstanding mortgage and a home equity loan could easily risk bankruptcy in this case.

Best Insurance offers the following tips for protecting one of your largest investments, your home:

·   Plan to review your home insurance at least once every two years and contact your Best Advisor before you begin any work.

·    Request a copy of the contractor's certificate of insurance from his/her insurance agent and request 30-days notice of cancellation.

·   Share the certificate with your advisor for his/her insight specific to your home to determine if there is any exposure.

·   Inquire if the contractor is licensed and bonded (not required in all states).
 

·   When opening your home to the elements (i.e. tearing down a wall, replacing a chimney), review your policy for theft and weather damage liability. Typical homeowners insurance may not cover inclement weather damage or theft during a renovation, because the homeowner created the vulnerability.

·   Always establish responsibility for uninstalled appliances, cabinets, carpet and other items in advance; the contractor should have a builder's risk policy or installation floater to cover these items.

·   If you plan to leave your home during remodeling, you could be jeopardizing your homeowners insurance if you are gone for more than 30 days. Most policies have vacancy clauses that vary from company to company, so be sure to check your policy. You can purchase a vacancy endorsement if needed.

Motorcycle Insurance

Florida Home Insurance Rates on the Rise:

Ever since Hurricane Andrew, home insurance rates have been consistently inconsistent. Every couple of years, insurers have cited several reasons for premium increases. Mold, reinsurance expenses, mitigation discounts and most recently "sinkhole losses".

Most recently, reinsurance expenses and sinkhole losses have played a huge role in the increase of home insurance premiums.

> For example, "catastrophic reinsurance" is insurance purchased by your home insurance company. These reinsurance companies are normally is not regulated in the US. Catastrophic reinsurance is nearly mandatory for all insurance companies. Reinsurance preserves the policy-holders' surplus (retained earnings).

> Sinkhole claims have caused many insurance companies to tweak the policies they provide. In most cases, coverage language has been amended, deductibles have changed and in many cases companies have eliminated "sinkhole coverage" altogether.

Mitigation discounts:

In February 2012, the state of Florida had adopted a new version of the "hurricane mitigation" report. The report is certainly more detailed and requires photographic evidence to substantiate the inspecting company's findings. In almost all cases, any policyholder obtaining a new report has had the majority of their discounts eliminated or reduced. In addition, insurance companies are "re-inspecting" homes already receiving these discounts and upon renewal, all deficiencies are calculated into the revised annual insurance premium. Usually higher!

Premiums have risen anywhere from 10% to 48%. The majority of these increases are not solely due to rate changes by the insurance companies, but are coupled together with incorrect mitigation findings.   

If you have never had a mitigation inspection completed, you are paying the highest "wind-related" premium possible.  We would suggest completing inspection as soon as possible. Inspections range from $75 - $125.  Please call the office at (954) 580-Best (2378) and we will be happy to provide you with a short list of names to get the inspection completed.