Because storms and hurricanes are more prevalent in Florida than other parts of the country, Florida homeowners need homeowners insurance to provide protection from financial loss associated with damage to their home. While we have been fortunate to go an extended period without a hurricane, homeowners insurance can also provide security and peace of mind against many other perils including fire, lightning, floods, burst pipes, broken plumbing, faulty water heater seals, electrical surges, vandalism, sinkholes and more.
If you have a HO-2 or HO-3 policy, these types of policies cover all hazards unless the policy expressly indicates otherwise. There are a number of terms and legal issues that your insurance company may raise if you file a claim. Because of the importance of these terms, I have provided an explanation of this terminology below:
Replacement Cost: If your policy provides for replacement cost, this value is the cost to purchase property of like quality and kind in the current market.
Loss of Use: These are extra expenses you incur if you cannot live in your home until the property is fixed. The specific type of expenses in this category would include the cost of a hotel, additional transportation costs and extra food expenses because of the temporary relocation. The only portion of these living costs that are covered are those expenses that are above and beyond what you would have spent had your home not been rendered uninhabitable.
All Risk Policy: This form of policy covers all perils except those that are expressly excluded by the policy.
Exclusions: Every homeowner insurance policy includes “exclusions” that the insurance carrier may refer to as a justification for not covering a particular peril or form of damage. Examples of some common exclusions might include:
- Earth movement (i.e. sinkholes/landslides)
- Flood (must purchase coverage separately)
- Intentional destruction causing loss
- Wear and tear (e.g. long-term rusting and deterioration of sewer pipes)
- Costs associated with compliance with building codes and safety violations
- Mold (grows over time)
As a general rule of thumb, sudden unanticipated losses are more likely to be covered than damage that gradually occurs over time. For example, a burst pipe or exploding water heater will be covered, but pipes that rust through and leak will not be covered. In most cases, additional coverage for these types of excluded hazards can be purchased for an additional cost.
Actual Cash Value: If your policy covers actual cash value, it will generally provide less compensation than a policy that provides replacement cost. Actual cash value takes into consideration depreciation of property that is damaged. If you have carpet in your home that has a useful life of 8 years, for example, you will not receive the full value of the cost to replace the carpet if the carpet is 6 years old. The value would be discounted based on the fact that the carpet only had 25 percent of its useful life remaining.
Alternative Living Expenses: This is really just another term to describe loss of use coverage. This form of coverage provides coverage for additional costs incurred as a result of a temporary relocation while your home is being restored to habitable condition.
If you are struggling to get your homeowners’ insurance company to pay you property damage claim, I invite you to contact my law firm with your questions. I am an experienced homeowners’ insurance claims attorney who handles disputed claims in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.