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Homeowner’s Insurance

Aug 01, 2023

Mike McEwen

Talk about a complicated subject, I had to get an expert to help me with this subject. Jay Jackson, who owns a State Farm agency in Jacksonville, spent a good bit of his personal time reviewing with me the many things that need to be considered when one insures his residence. This is not a simple subject. Here we go.

One thing that is crystal clear is that, when you insure your home, the coverage has to be sufficient enough to cover the dwelling if it is completely fire, tornado or whatever. There are essentially two ways to cover the dwelling. One way is to cover the dwelling based on its current value. The other way is to insure it for what it would take to build it from scratch. The second choice is usually the best; this is typically true when the structure being insured is a much older property. If you don’t insure it for replacement cost, you will have to take more out of your pocket to complete the reconstruction. This practice is very true for roofing. If it is only insured for current value and it turns out it needs replacing, the insurance will not cover the whole cost to replace the roof and you will have to take more money out of your pocket.

All dwelling policies have coverage for additional structures on the property, but that coverage is only for a percentage of the value of the coverage of the main dwelling. In many cases you will need to get additional coverage if the value of the additional structures exceeds that percentage.

Keep in mind that basic home insurance does not cover against earthquakes or flooding of the dwelling. If your home is in a flood plane – typically a 100-year floodplain – you need to get flood insurance. The cost of the premium is based, to a degree, on how much of the plane you may or may not be in. Jacksonville’s Buckner Park is in the floodplain, as are the homes around the park. FEMA – the Federal Emergency Management Administration – will no longer insure homes built in a floodplain, so if you’re getting ready to build in Jacksonville, go to the FEMA website to find out if the lot is in the floodplain. All you have to do is put in the street’s name or county road number, along with the city or county name. As for earthquakes, that is not worth worrying about in our area.

From an economic standpoint, insuring other property you own with the same insurance company will get you some discounts. For example, insuring your cars and home with the same company will get you discounts on your premiums.

Keep in mind that your home coverage also covers your personal property in your home, typically up to 75 percent of the value of your home. Home policies also provide liability coverage if someone suffers personal damage as a result of a harmful condition on your property. Policies are also covering cyber security and stolen identity.

You may have noticed that there are more homes in the area that have metal roofs. Metal roofs will get you a discount on your premium because they can typically withstand hail. Most metal roofs are not as appealing as shingles, but there is metal roofing that looks like certain kinds of shingles and even the round clay. In parts of Miami, Florida, shingles have to be made of masonry in order to withstand hurricanes. I have a metal roof on my home and it saves me $600.00 per year on my premium. It is warranted for life. Metal roofs may cost more than shingles, up front, but they are a lot cheaper over the years.

There are certain conditions that a basic policy will not cover, but there are endorsements that are available that will cover certain happenings that you may feel are important to have. For example, there are devices that can be installed in your home that will call the fire department if there is a fire in your home. If you’re not at home these devices could save your home from destruction. If you are concerned about your home having a leakage over 30 days before you catch the leak, there is an over 30 days of leakage endorsement. There are endorsements that address slab foundation leakages. There are endorsements that will cover temporary dwelling occupancy for up to two years while your new home is being rebuilt to replace the one that was destroyed. There is even insurance you can purchase that will take care of your mortgage payments and property taxes if you become disabled.

Bottom line, make sure your agent addresses all types of insurance that can help you as a homeowner. And my thanks to Jay Jackson for educating me.

Mike McEwen is a real estate broker with over 33 years in the business.

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