There are many different types of homeowners insurance policies available. Normally, the type of policy coincides with the type of structure to be insured and how the structure is occupied. The type of policy also correlates to the coverage available.

Owner-Occupied: The main difference between policies which cover an owner-occupied, single-family home is the perils covered. Basic or Broad Form policies (HO-1, HO-2) cover the structure for specified perils shown in the policy. Special form policies (HO-3) cover the structure for all perils except those specifically excluded in the policy.

Condo unit owners need a Condominium Unit-Owners Form (HO-6) which provides some coverage for the structure but primarily covers the personal property and liability of the insured. Condo unit owners' policies normally cover named perils listed in the policy. However, a special endorsement can be purchased to broaden the policy to cover all perils except what is excluded in the contract.

The condo unit owner's policy also provides Loss Assessment Coverage. Policies must include at least $2,000 of loss assessment coverage with a deductible no greater than $250. This coverage pays for your share of expenses for a covered loss to common property shared by all unit owners, up to the coverage limit.

Renters: If you rent or lease your home, you need a renter's policy (HO-4) to cover your personal property and liability.

Modified Coverage Form: Currently in Florida, there are many insurers offering a Modified Coverage Form, (HO-8). The (HO-8) offers less coverage than the (HO-2). However, due to the company’s underwriting criteria, this may be the only coverage form offered by the insurer. This form is mostly used for older homes.

Dwelling Form: There are other property policies available for risks that may not qualify for a Homeowners' policy. These are called Dwelling Forms. A Dwelling Form may be used instead of a Homeowners' Form in the case of an older home, a home that is rented to others, or for other underwriting reasons.

Mobile Home: Many insurers have discontinued the sale of mobile home policies that duplicate Homeowners’ policies. Some insurers issue a Dwelling Form (discussed above) to cover a mobile home, while others may use a HO-7 form. The difference in these forms is types of coverage provided.

Homeowners' insurance typically covers the dwelling including attached structures, certain unattached structures and your personal property. Additional Living Expense (ALE) and coverage for Liability is also normally included. All coverage is subject to the limits specified in the policy.

ALE provides indemnity for "additional" expenses of an insured who must live elsewhere due to a covered loss to the insured residence. ALE pays only reasonable "excess" expenses until the property is habitable.

There are special limits on certain items such as jewelry, guns, furs, money, cameras, art or antiques. You should review this list found in your policy and speak to your agent about additional coverage if needed.

Some Homeowners' policies do not provide sewer backup coverage. If there is damage from water backup from an outside sewer or drain, the policy may exclude it, however this coverage may be added via endorsement.

Flood damage is not covered by your Homeowners' insurance policy. The definition of flood typically includes an overflow of inland or tidal waters and runoff of surface water from any source, or mudflow. If you need flood coverage you must purchase a flood insurance policy.

Replacement Cost vs Actual Cash Value
There is a clear distinction between these terms. Actual cash value (ACV) refers to a policy that covers items for their value at the time they are lost or stolen. This means depreciation will be deducted from the replacement cost value of the items. Replacement cost refers to the cost to replace an item, regardless of how old or outdated it may be.

Most replacement cost policies require you to carry limits equal to a certain percentage of the replacement value (normally 80%). If you fail to carry the correct amount of insurance coverage, you may be responsible for a percentage of a partial loss.

Both types of contracts are available in Florida. You should refer to your own contract to determine how your loss may be settled.

Inflation Guard
Many insurance companies include a provision known as inflation guard in homeowners' insurance policies, so values increase on a yearly basis. However, this does not guarantee that the annual percentage increase is sufficient values to keep up with the cost of construction. This provision helps prevent problems of homes being underinsured. It is still the responsibility of the insured to evaluate their coverage every year to determine whether the amount on the policy is sufficient. If an insured has concerns about the amount of coverage, they should speak with their agent about completing a new replacement cost estimate for their home.

There are many types of property inspections. The most common are listed below. If the insurer requests a 4-point or specialized inspection and it is not provided, the insurer may refuse to provide certain coverage or may refuse to insure the property.

Underwriting Inspection (Insurer Pays Cost): An insurer may require a visual inspection prior to writing a policy. This inspection is performed to verify information given on the application about the home and property. The insurer may verify the construction of the home and whether there are potential hazards on the property such as unacceptable animals, pools, trampolines, unrepaired steps, steps without handrails, etc. The insurer may use the inspection to determine the presence of certain types of wiring or electrical panel boxes they believe increase the risk of a fire.

The inspection may also verify the maintenance of the home such as whether the property has any unrepaired damage. The insurer considers whether the home is properly maintained, such as, overgrown grass and weeds, trees with dead limbs near the home, non-operating vehicles on the property, etc. The insurer decides what risks to assume or avoid. If the insurer finds any of the risks listed above (this is not an all-inclusive list), they may refuse coverage.

Insurers hire their own inspectors or inspection firms to inspect the condition of a property prior to the issuance or renewal of a policy. This is a part of the underwriting process. These inspectors are hired and paid by the insurance company, so the company decides who to use and what qualifications they must meet. Florida law does not address who an insurance company can hire for their underwriting process. The Department of Financial Services would not have authority to intercede on an inspector’s behalf if they were denied employment/contracts with an insurer.

4-Point Inspection: If you are insuring an older home, the insurer may require an inspection of the following items: The roof (to determine its life expectancy), the plumbing, electrical wiring, or heating and air. The insured/applicant pays for this inspection.

Specialized Inspection: Sometimes, an insurer may request an inspection of only one item, such as the roof. The determination of the life expectancy of a roof is one of the most common inspections requested today. Another common inspection requested in certain areas is to determine the presence or likelihood of sinkholes. The insured/applicant pays for this inspection.

Mitigation Inspection: Policyholders may elect to have an inspection to determine what wind mitigation credits they are entitled to receive on their homeowners' windstorm premium. These inspectors complete the OIR-B1-1802 inspection form for the insured to submit to their insurance company. This form is also called the Uniform Mitigation Verification Inspection Form. Insurers have the right to reinspect your home to verify your entitlement to premium credits. The consumer normally pays for this type of inspection. However, if the insurer elects to reinspect a property, the insurer pays for the inspection.

Are you aware that hurricanes can cause major damage to your home?

Hurricanes have caused tens of billions of dollars in insured damages and predictions of more catastrophic hurricanes making landfall in Florida have triggered increases in insurance premiums to cover potential future losses.

Taking certain mitigation steps to protect your home from hurricane-force winds will not only keep your family safe, they can result in premium discounts from your insurance company. Use this guide to learn more about premium discounts for hurricane loss mitigation.  Available for Download in  English

Property Insurance Premium Base Rates are developed using several factors

• The location of the property: The city, county, zip code can be used to establish the territory.

• The amount of coverage on the dwelling.

• The fire protection class: The rating of the fire department in that territory. The ratings range from 1-10 established by the Insurance Services Office. A rating of Class 1 represents exemplary fire protection, and Class 10 indicates that the area’s fire-suppression program does not meet minimum criteria.

• Mitigation Credits given for certain items that help reduce hurricane/windstorm losses, such as installation of hurricane shutters.

• The construction of the dwelling such as wood frame, concrete block, brick, etc. Companies charge different premiums based on the fire resistance of the construction material.

• Some insurance companies charge a higher premium according to the age of the home.

• Some insurance companies charge a higher premium if you did not maintain uninterrupted prior homeowners' coverage.

After the base rate is determined, other rating factors are applied to determine individual surcharges and credits. Also, current assessments are added to the base rate to determine the final rate.

In most instances, an insurer must charge the rates that they have filed with the Office of Insurance Regulation (OIR). However, with written consent of the insured signed prior to the policy inception date, the insurance company may use a rate in excess of the otherwise applicable filed rate on any specific risk. The consent must be obtained on a form that informs the insured of the rate filed with the OIR and the alternate rate being charged. This is also referred to as Excess Rates. An insurance company may not use a consent to rate form for more than 5 percent of its personal lines policies written or renewed in each calendar year.

Underwriting guidelines vary between insurers. However, below are a few of the most common things an insurer reviews when determining whether to insure a new property or how much to charge. They also use the same guidelines to determine whether to offer a renewal policy.

The insurer may consider the age of the home, roof, plumbing, electrical wiring and the heating and air conditioning systems. They consider the condition and location of the home and who occupies it. They may refuse to insure an individual who owns certain animals. Most insurers believe the presence of certain animals on the premises increases liability risk. The credit and loss history of the applicant is also considered. If the insurer makes an underwriting decision based on adverse information contained in a credit report, they must furnish the insured with a copy of the report or provide the name, address, and telephone number of the reporting agency.

If an insurer refuses to insure an applicant or if it decides to nonrenew or cancel an existing homeowner's policy, it must provide advance notice to the insured and provide the specific reason for their decision. This is discussed further in the cancellation and nonrenewal sections below.

Cancellation means the termination of an insurance policy before its normal expiration date (in other words, mid-term). If the company sent you a non-renewal notice, the requirements are discussed under the Nonrenewal Tab.

Insurers must provide a specific reason for cancellation in their notice to the insured. Depending on the situation, the following advance notices must be provided to the insured:

• Binders, 5 days unless it was issued for more than a 60-day period;

• During the first 60 days of contract, insurers must provide 20-day advance notice with certain exceptions;

• A 10-day advance notice if the premium is not paid;

• After the first 60 days of contract, the insurer may only cancel for misrepresentation, non-payment of premium, failure to comply with underwriting requirements, a substantial change in the risk, or if all policies in a given class of insureds are being cancelled.

• Exception: Insurers may cancel policies with 45-days advance notice if the OIR determines that the early cancellation of the policies is necessary to protect the best interests of the public or policyholders. The OIR must also approve the insurer’s plan for early cancellation or nonrenewal.

Act of God Claims: Only under certain circumstances is it permissible for claims on property insurance policies that are the result of an "Act of God", to be cited as the reason for cancellation. The insurer must demonstrate, by claims frequency or otherwise, that the insured has failed to take reasonably necessary action, as requested by the insurer, to prevent recurrence of damage to the insured property. However, the insurer may raise a deductible at renewal.

Daycare on Premises: With exceptions, Florida law prevents an insurer from canceling a homeowners' insurance policy solely based on operating a daycare business at the residence. The insurer may cancel a policy if one or more of the following conditions exist:

• The insured does not carry a separate liability policy or endorsement at all times that provides liability coverage for the daycare home operations;

• The insured fails to comply with the daycare licensure and registration requirements; or

• The insurer discovers any willful or grossly negligent acts or omissions, or any violations of state laws or regulations establishing safety standards for daycare homes by the insured, or by his/her representatives which materially increase any of the risks insured;

• The insured cares for more children than allowed by law.

During a Hurricane: If a cancellation is scheduled to take place during a hurricane, the insurer is required to extend coverage until the end of the duration of the hurricane. However, the insurer may charge the premium rate in effect for the extended coverage.

Mortgage Company's Failure to Pay Premium from Escrow: If funds were available in escrow and the mortgage company failed to pay the premium in a timely manner resulting in cancellation of the policy, the insurance company should reinstate coverage with no lapse if the premium is received within 90 days of the renewal date. The lender should reimburse the property owner for any penalty or fees imposed by the insurer and paid by the property owner for purposes of reinstating the policy

If the lender pays the premium more than 90 days after the effective date, and the insurer refuses to reinstate the insurance policy, the lender shall pay the difference between the cost of the previous insurance policy and a new, comparable insurance policy for a period of 2 years. However, this law is not included in the Insurance Code. Therefore, complaints regarding the lender should be referred to the Office of Financial Regulation (OFR) at (850) 487-9687.

Pending/Open Claim or Existing Damage: Currently, there are no laws that prohibit an insurer from cancelling a property policy if the insured has a pending claim except upon a declaration of an emergency and the filing of an order by the Commissioner of Insurance Regulation.

Premium Refund Timeframe: When a Property Policy is cancelled by the insurer or the insured, any unearned premium must be returned to the insured within 15 working days after the effective date of the cancellation. (Unless the policy is subject to an audit) If the premium is financed with a Premium Finance Company, the unearned premium must be returned to the Premium Finance Company.

Sinkhole Claim: Florida law states an insurer may not cancel any property policy on the basis of a claim for a partial loss caused by a sinkhole, as long as the total of the claim payments do not exceed the current policy limit and provided the insured has repaired the structure in accordance with the engineering recommendations. If the policy limits are paid, the policy can be nonrenewed by the insurer.

Water Damage Claim: A single claim on a property insurance policy which is the result of water damage may not be used as the sole reason for cancellation unless the insurer can demonstrate that the insured failed to take reasonably necessary action as requested by the insurer to prevent a future similar occurrence of damage to the insured property.

A nonrenewal is the termination of an insurance policy at its normal expiration date.

Insurers must provide a specific reason in their notice to the insured if it nonrenews a policy. They must also provide advance notice to the first named insured listed on the policy as specified below.

Notice Required

Insurers must give the first named insured written notice of nonrenewal at least 120 days in advance with the following exceptions:

• Other company assumes Citizens policy or offer of coverage through the eligibility clearing house program: Citizens Property Insurance Corporation must give a 45-day advance written notice for policies being assumed by an authorized insurer. The 45-day notice requirement also applies when an insurer agrees to offer coverage through the eligibility clearing house program.

• Home and motor vehicle policy combined: 90-days advance notice of nonrenewal for policies that cover both a home and motor vehicle. The policy can be nonrenewed for any reason applicable to either the property or motor vehicle insurance.

Act of God Claims: Only under certain circumstances is it permissible for claims on property insurance policies that are the result of an "Act of God", to be cited as the reason for nonrenewal. The insurer must demonstrate, by claims frequency or otherwise, that the insured has failed to take action reasonably necessary as requested by the insurer, as requested by the insurer, to prevent recurrence of damage to the insured property. However, the insurer may increase the deductible at renewal due to act of God claims.

Credit Report/Score: Insurers cannot nonrenew a homeowner's policy solely based on information from a credit report, for having no credit history, or for having an adverse credit history due to medical bills. Also, if the insurer refuses to insure or nonrenews a policy due to adverse information contained on a credit report, they must furnish the insured with a copy of the report or provide the name, address, and telephone number of the reporting agency.

Daycare on Premises: With exceptions, Florida law prevents an insurer from nonrenewing a homeowners' insurance policy solely based on operating a daycare business at the residence. The insurer can nonrenew a policy if one or more of the following conditions occur:

• The insured cares for more children than allowed by law;

• The insured does not carry a separate liability policy or endorsement at all times that provides liability coverage for the daycare home operations;

• The insured fails to comply with the daycare licensure and registration requirements; or

• The insurer discovers any willful or grossly negligent acts or omissions, or any violations of state laws or regulations establishing safety standards for daycare homes by the insured, or by his/her representatives which materially increase any of the risks insured.

During a Hurricane: If a nonrenewal is scheduled to take place during a hurricane, the insurer is required to extend coverage until the end of the duration of the hurricane. However, the insurer may charge the premium rate in effect for the extended coverage.

Nonrenewal of more than 10,000 policies: An insurer planning to nonrenew more than 10,000 residential property insurance policies within a 12-month period must advise the OIR 90 days before the issuance of any notices of nonrenewal. The notice to the OIR must disclose the reason for the nonrenewal, the effective dates, and any arrangements made for other insurers to offer coverage to affected policyholders. This requirement does not apply to the policies being nonrenewed to exclude Sinkhole coverage.

Pending/Open Claim or Existing Damage: The authorized insurers are prohibited from canceling or nonrenewing a personal or commercial residential policy for a period of 90 days after the property has been repaired if it has been damaged by a hurricane or wind loss subject to a declaration of emergency by the Governor.

Single Water Damage Claim: A single claim on a property insurance policy which is the result of water damage may not be used as the sole reason for nonrenewal unless the insurer can demonstrate that the insured failed to take action reasonably requested by the insurer to prevent a future similar occurrence of damage to the insured property.

Sinkhole Claim: Florida law states an insurer may not nonrenew any property policy based on claims for loss caused by a sinkhole, if the total of the claim payments does not equal or exceed the policy limit or if the insured has repaired the structure in accordance with the engineering recommendations. If the policy limits are paid, the policy can be nonrenewed by the insurer. (The policyholder can also request cancellation of the policy once the policy limits are paid and should receive a refund of any unearned premium that may apply.)

Sinkhole Coverage Elimination: An insurer may nonrenew a property policy that provides Sinkhole Coverage. However, the insurer must offer the policyholder a policy that provides coverage for Catastrophic Ground Cover Collapse instead. The insurer must provide the reasonable premium credit or discount for the removal of sinkhole coverage and provision of only catastrophic ground cover collapse. The policyholder must be notified that the nonrenewal is for the purpose of removing sinkhole coverage, and that the policyholder is being offered a policy that provides catastrophic ground cover collapse. Subject to the insurer's approved underwriting and insurability guidelines, the insurer must provide the policyholder with the opportunity to purchase an endorsement which provides sinkhole coverage. The insurer may require an inspection of the property before issuing the endorsement.

Wind Coverage Elimination: Only under certain circumstances can an insurer exclude windstorm coverage from a residential property policy. In such cases, wind only coverage may be obtained from the Citizens Property Insurance Corporation or private market.

Per s. 627.43141, F.S., a property and casualty contract renewal may contain a change in policy terms. If a renewal contains such a change, the insurer must give the named insured written notice of the change which may be included with the notice of renewal premium required by s. 627.4133, F.S. 627.728, or sent separately within the specified timeframe. The insurer must also provide a sample copy of the notice to the named insured’s insurance agent before or at the same time the notice is provided to the named insured. The notice must be entitled “Notice of Change in Policy Terms.” 

A renewal policy, which includes the addition of optional coverage that increases the premium to a policyholder, may not use the “Notice of Change in Policy Terms” to add the optional coverage to the policy unless the policyholder affirmatively indicates to the insurer or agent that they approve the addition of the optional coverage. Optional coverage is defined as the addition of new insurance coverage that has not previously been requested or approved by the policyholder.

Although not required, proof of mailing or registered mailing through the US Postal Service of the “Notice of Change in Policy Terms” to the named insured at the address shown in the policy is sufficient proof of notice.

Receipt of the premium payment for the renewal policy by the insurer is deemed to be acceptance of the new policy terms by the policyholder.

If an insurer fails to provide the required notice, the original terms remain in effect until the next renewal and the proper notice is given, or until the effective date of replacement coverage obtained by the policyholder, whichever occurs first.

Please note: “Change in Policy Terms” means the modification, addition, or deletion of any term, coverage, duty, or condition from the previous policy. The correction of typographical or scrivener’s errors or the application of mandated legislative changes is not a change in policy terms.

The intent of this law is to allow an insurer to make a change in policy terms without nonrenewing policyholders they wish to continue insuring. In addition, it alleviates concern and confusion to the policyholder caused by the required policy nonrenewal if the insurer intends to renew the insurance policy, but the new policy contains a change in policy terms. The law is intended to encourage the policyholders to discuss their coverages with their insurance agents.

Non-matching replacement materials: When a loss requires replacement of the damaged items and the replaced items do not match in quality, color, or size, then the insurer should make reasonable repairs or replacement of items in adjoining areas. In determining the extent of the repair or replacement of the undamaged portions, the insurer may consider the cost of such repair or replacement of the undamaged portion, the degree of uniformity that can be achieved without such cost, the remaining useful life of the undamaged portion and other relevant factors.  

Debris and Tree Removal: Most insurance policies cover debris & tree removal if the downed tree damaged insured property regardless of who owns the tree. However, there are usually limits that the company will pay. There is usually no debris removal coverage if the trees fell on the ground and did not damage covered property. Some policies provide debris & tree removal if the downed tree blocks the main entrance to the property. Since insurance policies vary between insurers, you should always refer to your own personal contract.

Insurer's duty to acknowledge claim communications: An insurance company must review and acknowledge receipt of a claim-related communication within 7 calendar days, unless payment is made within that period, or unless the failure to acknowledge is caused by factors beyond the insurer's control.* A communication made to or by a representative of an insurer constitutes communication to or by the insurer. The communication can be made in writing, verbally, or any other form.

Within 7 days after the company receives proof of loss statements, the company must begin its investigation of a claim unless the failure to investigate is caused by factors beyond the control of the company.*

Insured's duties after a loss: When a loss occurs, the insured should promptly notify their agent or insurance company, and review the Conditions and Duties after a Loss sections of their policy. There are separate conditions for Section 1 (Property Coverage) and Section 2 (Liability Coverage) of the contract. If more than one insurance policy covers the occurrence, all insurers should be notified. Initial and reopened property damage claims must be reported within 1 year after the date of loss. Any supplemental claims must be reported within 18 months after the date of loss.

The insured has a responsibility to mitigate damages to their property and protect the property from further damage. The insured should make reasonable temporary repairs and keep accurate records and receipts of those repairs. It is always a good idea to take photos of the damage prior to making temporary repairs, if possible.

The insured should also compile an inventory of all damaged personal property. The inventory should include the date of purchase, quantity, description, value, and the amount paid for each item. The insured may be asked to provide receipts, bills, and any other related documents to justify the amounts provided.

The insured must cooperate with the company in the investigation of the claim. The insured and/or other parties may be asked to provide a recorded statement or an examination under oath.

If the occurrence is related to a liability issue, the insured should forward all notices, demands, summons, or other process documents relating to the "occurrence " to the insurer immediately upon receipt.

Notice of Windstorm or Hurricane Claim: The time period an initial, supplemental or reopened claim can be presented to an insurer under a property insurance policy providing coverage for windstorm or hurricane is limited. Under current Florida law, these claims are barred unless notice was given to the insurer in accordance with the terms of the policy within 1 year (for initial claims) or 18 months (for supplemental claims) after the hurricane first made landfall or the windstorm caused the covered damage.

Timeframe for Payment of Claim: Within 60 days after an insurer receives notice of a new, reopened or supplement property insurance claim, the insurer must pay or deny the claim. If the settlement amount is contested, the insurer should pay all uncontested amounts within the 60-day timeframe unless the failure to pay the claim or the uncontested amount is caused by factors beyond the control of the company.* Any payment (for a portion or for the entire claim), paid more than 60 days after the company receives notice of the claim, or paid after the expiration of any additional timeframe for making payment provided by the OIR when it finds factors beyond the control of the company,* whichever is later, will bear interest according to Section 55.03, Florida Statutes.

*Please note: "Beyond the control"  means 1) any state of emergency declared by the Governor, a breach of security that must be reported under s.501.171, F.S., or an information technology issue that serves as the basis for the Office of Insurance Regulation issuing an order that such event renders all or specified property insurers from reasonably being able to meet the requirements of s. 627.70131, F.S., and 2) any actions by the policyholder or his/her representative which constitute fraud, lack of cooperation, or intentional misrepresentation regarding the claim which reasonably prevents the insurer from complying with  these requirements.  

Valued Policy Law: In the event of the total loss of any building, structure, or mobile home, the insurer's liability under the policy for the loss is the face amount of the policy, if such loss was caused by a covered peril.

Verify before you buy! Contact us to verify the license of the agent and the insurance company before you sign the application for a policy.

Prepare a Home Inventory Checklist! A home inventory – along with photos and proof of ownership - will make it easier to file an accurate, detailed insurance claim in case your home is damaged or destroyed. When you have a loss, it is your responsibility to know what property you have, when it was purchased, how much you paid for it, and how much it will cost to replace it. You should also keep receipts for large purchases or keep your credit card statements. You may be asked to prove that you ever owned the item in question. It is always a good idea to take pictures or videos of your property as well.

Make sure your home is properly insured! If you have a replacement cost policy and fail to maintain the proper amount of insurance, you may be penalized when filing a claim. Although most homeowners' policies include an inflation guard endorsement to automatically increase your coverage annually, you should check with your insurance agent once a year to make sure you have adequate coverage.

Read your policy carefully! Insurance policies differ between insurance companies so you must review your own contract. Insurance policies do not cover everything, read the exclusions. Also, there are limitations on certain types of personal property, such as antiques, firearms, jewelry, furs and electronics, including computers and their equipment. In most instances, additional coverage may be purchased. Talk to your agent about additional coverage.

Keep a copy of your important documents in another location! In the event your home is damaged or destroyed, you would have copies of all your important documents including receipts you may need to settle a claim with your insurance company.

• ONLINE: Get Insurance Help
• EMAIL: Consumer.Services@myfloridacfo.com
• FLORIDA INSURANCE CONSUMER HELPLINE
  Statewide/Toll-free: 1-877-693-5236 Out of State: (850) 413-3089