Property Insurance: General

Office of Insurance Regulation Commissioner Kevin McCarty appeared before the Financial Services Commission January 13 to outline the strenuous review conducted by the Office of new residential insurance companies to make sure they can pay claims following a hurricane. McCarty was responding to criticism of the soundness of some small, new insurers in media reports.

His Powerpoint Presentation to the FSC is available from this link:

OIR: State Makes Certain New Homeowners Insurers are Sound

A December 19, 2008 release by CFO Alex Sink

From homeowner to renter: What you need to know about renter’s insurance

As the economic downturn continues, more people are losing their homes to either foreclosure or financially motivated downsizing. In fact, foreclosure filings increased by five percent in October, a 25 percent increase from October 2007.

As homeowners, most people carry a mortgage and, therefore, have no choice but to purchase homeowners insurance as a requirement of their loan. But, for renters, the choice is their own — and many people facing financial uncertainty might choose to go without renter’s insurance, even though they have most of the same risks as homeowners when it comes to protecting possessions or being liable for accidents at home.

Some of the most common misperceptions include:

Renter’s insurance is too expensive, and I already have enough bills to pay.

The average renter’s insurance policy costs between $15 and $30 per month. Replacing all of your possessions or being liable for an accident on your premises will cost much more.

I don’t have that many valuables; renter’s insurance isn’t worth the cost.

Renter’s insurance policies can cover everything from electronics to clothing to household appliances. Even a minimal number of items could add up to thousands of dollars’
worth of merchandise, which can all be covered in a basic policy.

My landlord has insurance, so I’m already protected.

Your landlord has insurance for structural damage to the building, and might even be protected against damage caused by tenants. However, this coverage does not extend to your personal property, personal liability, or  from being liable for damage you might cause to the building inadvertently (such as a kitchen fire or a plumbing mishap).

Consumers used to having homeowners insurance as part of their mortgage may not think about needing to obtain a renter’s insurance policy. Here are some tips for former homeowners who are now renting and for renters who have not yet purchased renter's insurance:

1. How much renter’s insurance do you need? Talk to your insurance agent or company about the property you want to protect and the property hazards for which you would like to be insured. Your agent can give you policy coverage specifics based on Florida residency and the type of policy you want. Your agent will answer any important questions you have about:

What hazards are included in your plan and whether you need a separate policy for specific circumstances, such as a hurricane or flood;
Whether property in storage facilities is covered;
How your insurance plan affects your roommate(s), if any;
How you should determine value for your items;
What the insurance terms mean;
What the policy includes;
What optional coverage might be available for extra protection, as floaters or riders, for jewelry, artwork, antiques or other high-priced items. .

2. Is there a discount on renter’s insurance if your residence has particular safety features, like a burglar alarm? Many insurers will reduce your premiums for fire or burglar alarms, fire extinguishers, sprinkler systems and/or deadbolts on exterior doors. Some companies might also offer discounts if you have more than one policy, such as car insurance, with them.

Be sure to ask about any discounts you might be entitled to.

3. Are you covered in the case of flood, hurricane winds or earthquake? These natural disasters are not generally covered by a renter’s or homeowners insurance policy. Ask your insurance agent or company if your policy fully protects you or whether you need to purchase additional coverage.

4. Are your possessions insured for the actual cash value or the replacement cost? Actual cash value is the amount it would take to repair or replace damage to your home or possessions after depreciation while replacement cost is the amount it would take to repair or replace your home or possessions without deducting for depreciation. Speak with your insurance provider to determine whether purchasing replacement coverage is worth the extra cost.

5. Does renter’s insurance only cover your possesions at home? Many policies do not limit protection to home-based situations. For example, items you have insured often are covered if they are stolen from your car or damaged while not on your property.

6. Is personal liability included? A renter’s insurance policy covers your personal property and your personal legal responsibility (or liability) for injuries to others and/or their property while they are on your property.

7. Will you receive additional living expenses if you have to live somewhere else while your apartment is being repaired? If there is damage to the building you are renting and you must live elsewhere while the building is being repaired, you will have coverage for additional living expenses incurred during the reconstruction period.

8. How do you expedite your renter’s insurance claim? A home inventory – along with photos and proof of ownership – make it easier to file an accurate, detailed insurance claim in case your possessions are damaged or destroyed in a disaster. Make periodic updates to your inventory of belongings and supplement them with photos or videos. Keep sales receipts or cancelled
checks for certain possessions to validate insurance claims. Store copies of your insurance policies, key receipts and inventories away from home or in a fireproof safe.

Remember, the more detailed documentation you supply during the claims process, the fewer problems you’ll have with the claim itself. A home inventory can also help determine how much coverage you will need from your renter's insurance policy.

Download a free home inventory checklist (look for Section 2) in the Florida Department of Financial Services' Financial Tool Kit at

http://www.myfloridacfo.com/Consumers/Guides/disaster/docs/homeowners_tool_kit_2008.pdf.

A recent NAIC survey found that 48 percent of homeowners didn't have any inventories of their possessions. Of those with a checklist, 58 percent lacked receipts and 32 percent didn't have any photos. A comprehensive list of your belongings and their value will help you file an insurance claim after a disaster. Creating an inventory and storing it in a safe location away from home is one of the most basic — and most effective — disaster preparedness steps anyone can take to help protect themselves and their financial future.

The NAIC survey also found that 43 percent of U.S. adults with homeowners or renter’s insurance owned policies that provided a replacement cost payout. Of the remaining consumers, 27 percent indicated their policies insured their homes for the actual cash value, while another 28 percent did not know which type of coverage they purchased. Understanding the terms of your policy and reviewing your coverage on an annual basis will help you avoid surprises if the need for a claim arises.

If you have questions about your insurance policy, contact the Florida Department of Financial Services Consumer Helpline at

1-877-MY-FL-CFO (1-877-693-5236).

Florida is one of several states to utilize ISO's Building Code Effectiveness Grading System, which measures the qualify ot local government building code enforcement and, thereby, the quality of new construction. Residents of communities with good grades from ISO pay lower property insurance rates than areas with poor grades.

The discount varies and may not necessarily be huge, but it is enough to notice.

The Office of Insurance Regulation has developed an Internet site on the ISO system, including direct links to report on the ISO site.

It is available from this link: http://www.isomitigation.com/bcegs/0000/bcegs0001.html