Citizens Homeowners Insurance Florida involves many rules. The state’s law does not require homeowners insurance, but the government encourages you to purchase it to give better protection from financial loss due to hurricane and windstorm. The Citizens Property Insurance Corporation is managed by the state’s government indeed. However, it is important to keep a proper balance between homeowners’ interest, government’s interest, and, of course, private insurers’ interest. Some of the most relevant rules you should know are as follows.
Homeowners insurance in Florida covers damages caused by hurricanes or windstorms and all related damages, except flood. Insurance companies are required to offer separate flood insurance for homeowners, so there is no confusion afterward. You can buy flood insurance from private insurers or the National Flood Insurance Program. Before purchasing the different coverage, it is recommended to discuss the matter with an agent to get a clear understanding of possibly uncovered losses.
Citizens Homeowners Insurance Florida, both run by the government and private entities, should pay the full replacement cost of damaged properties. It does not matter if the owner only needs to repair any damaged property, and the payout should be the full replacement cost. To get this benefit, homeowners must purchase replacement cost coverage.
Florida Citizens Property Insurance or any private homeowners insurance company in the state is not allowed to cancel your policy. After it has been effective for at least 90 days unless you fail to pay the premium, lie on policy application, fail to comply with insurance regulation, or when there is a substantial change of risk. In case a company decides not to renew your policy, it is required to give you a 90-day notice period.
Office of Insurance Regulation in Florida states that all homeowners insurance policies have at least $500 deductible for hurricane coverage. There are, however, 2 and 3 percent certain options. About 70% of all homeowners policies in Florida are with 2 percent option; in case you purchase coverage worth $50,000, your deductible will be $1000.
It is not allowed for homeowners insurance company to deny providing coverage based on the age of the property. Instead of using age as a variable to determine policy approval, insurance companies should consider wind resistance factor and any existing structure improvement to minimize damages due to a hurricane.
Citizens Homeowners Insurance Florida is not the same as Citizens Insurance Company of America. The former is a not-for-profit corporation run by Florida’s government while the later is a homeowners insurance Michigan, a for-profit subsidiary of The Hanover Insurance Group.