The Importance of Homeowner’s Insurance.

Murphy’s Law states “whatever can go wrong, will go wrong”. When things go wrong in your home it can be financially strenuous, that is why having home owners insurance is so important. Below you will find answers to some of the most common questions homeowners have about insuring their home.

Why is it important to obtain homeowner’s insurance?
A home is, for most people, their biggest and most valuable asset and therefore it must be protected. Disasters can happen at any time to anyone. Fires, floods, and here in South Florida: hurricanes can completely destroy your home. Having home insurance protects you financially in case the worst happens.

Furthermore, if you are financing your home, most lenders require you to purchase home insurance to protect their investment.

Do all properties require the same type of insurance?

The type of insurance policy you must purchase depends on the type of property you are buying and what it will be used for. Policies vary if the property is a single family home, a condo/townhome or if the property is tenant occupied.

Single family homes require an HO3 policy as long as the owner of the property is the one occupying the home. However if the home is an investment and there is a tenant on the property then you must have a DP3 Policy which only covers the structure not the tenant’s belongings.

Condos on the other hand require an HO6 policy regardless of occupancy by a tenant or owner.

What if the home I’m purchasing has an association and the association has insurance?

Typically the association, if it does have insurance, only coverts the outside of the property: the roof, the exterior concrete walls, etc. but not the interior of the property. Therefore it is important to insure the interior of the home.

How is coverage determined?

In the State of Florida, coverage is determined by the cost to rebuild the in the event of a total loss, it is not market value, appraisal value or the loan amount.

What documents are required to quote a home owners insurance policy?

To purchase an insurance policy you will need a four point inspection and a wind mitigation inspection. Typically the insurance carrier will require a four point inspection if the home is over 30 years old, if the home is less than 30 years old the four point inspection is not required. The four points are: roof, electrical, plumbing and heating.

You will also need a wind mitigation report. The wind mitigation is the one inspection that will give you credits towards your home insurance.

The wind mitigation and four point inspection reports have to be obtained from a licensed inspector, make sure you ask for them.

The purchase of a home can be a daunting endeavor, thankfully the top rated agents of the Velez Premier Group are here to help you along the way.