This article is designed to answer many questions we routinely hear form policyholders about homeowner’s insurance. This blog is intended to arm homeowners with information necessary to obtain the maximum value from their homeowner’s coverage.  

How can you determine if your policy provides coverage for losses caused by extreme weather?

Losses resulting from hurricanes, hail, and severe windstorms are covered under most homeowner’s policies.  If your home is damaged by a flood, for example, the loss will not be covered unless you have obtained separate coverage through the National Flood Insurance Program.  Similarly, coverage for damage caused by the accumulation of snow and ice might necessitate payment of additional coverage.  Take the time to review your policy or to have a professional explain the policy to you.

Is your insurer entitled to inspect your home after you file a claim?

Yes.  Homeowner’s polices require policyholders to cooperate during the adjustment process, so the insurer can determine the extent of the damage, cause of the loss, and appropriate remedial strategies.  Typically, the person the insurer sends to conduct an inspection will contact you to arrange an appointment especially if the inspection will include the inside of the premises.  

Are you entitled to receive your entire premium amount refunded if you cancel your policy during the coverage term?

The insurer may have the right to keep a portion of, or all of the premium depending on the terms of the policy.  Some policies require the insured to pay a certain minimum premium or specify that the full premium is “earned.”  Certain policies also require an insured who changes his or her insurance carrier mid-term to pay a “short-rate” penalty. 

Do you need special coverage if you travel frequently for extended periods?

Standard homeowner’s policies generally contain an exclusion that applies if the home is going to be vacant for an extended period like 30-60 days.  If you travel for extended periods or might need time to secure a new tenant for a rental property, you might want to purchase special coverage for losses that occur during extended periods of vacancy.  Insurers require an endorsement and special premium for this coverage because homes are more vulnerable to vandalism when they are clearly empty.  Further, the homeowner is in a better position to cope with a peril that causes loss when residing on the premises.  The increased ability of a homeowner to prevent a loss or mitigate the extent of the damage explains the rationale for the vacancy exclusion.

How should a consumer proceed in terms of evaluating the viability of an insurance company?

When a major catastrophe occurs, such as a hurricane, insurance companies are inundated with a plethora of claims.  A large influx of claims can threaten the financial viability of an insurance company.  However, there are a number of factors that you can consider when determining whether an insurer will be able to pay your claim in such a situation.  These factors include:

  • Risk-to-Capital:  This evaluative approach weighs the risk carried by an insurer against its assets.  The risk is based on the insurer’s investments and existing policies.  If an insurer’s score based on this standard falls below 200, regulatory authorities will step in.  The insurer is more financially stable if it has a higher risk-to-capital score.
  • Leverage: If the insurer has more cash available to pay claims, the insurer will be less likely to face cash-flow issues when presented with multiple claims arising from the same major event.
  • Reserves: Florida law requires that insurance companies have at least $10 million put aside to handle emergencies, but certain industry experts suggest that an insurer should have at least $25 to $30 million in reserves.

 You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].

J.P. Gonzalez-Sirgo
J.P. Gonzalez-Sirgo, P.A.
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