If you own a home in Florida, then you know just how tough it can be to obtain adequate and affordable home insurance. Insurers here are becoming stricter about who they decide to insure, as they try to lower their risks in our hurricane-prone state.
This means carriers are asking even more questions about their applicants. It’s no longer just about the type of home you have and its proximity to the ocean. Here are a few of the most commonly asked questions on a Florida home insurance application.
Why all the questions?
Florida insurance companies take into consideration dozens of factors in order to determine whether insuring your home is a good risk to take. One of the ways that insurers collect this information is by asking the applicant a series of questions.
Warning: Some applicants may be tempted to provide misleading information to insurers so that they can obtain a lower rate.
However, most insurers conduct home inspections to ensure the information you have provided is correct. If they find the information is not correct, the insurer will most likely cancel the policy and the homeowner will be left without protection until they can find a new policy.
Questions about you
Do you have a job or own a business?
Many insurance companies ask about the employment status of their applicants. Some also ask about the occupation specifically.
This is because insurance companies are consistently weighing their risks, and some jobs are correlated with fewer claims, which could result in a discount. As an applicant, it’s important you state whether or not you have a job or run your own business. Be sure to note if you’re retired as this may also lead to some premium discounts.
Do you own or occupy another residence?
Many insurance companies agree to insure homes under the assumption that the home is occupied. It is no secret that homes that are not owner-occupied are more likely to have a claim. Vacant homes many attract burglars while tenants do not typically look after the maintenance of a home as well as the owner would.
For this reason, an insurer might ask if you own or occupy a separate residence in trying to determine how often your current property would be vacant. Many carriers assume there will be short stints of vacancies in most homes. But if your home is vacant more often than not, this could mean a higher insurance premium.
Will you be living in this home within the next 30 days?
This question goes hand-in-hand with the previous question. Insurance companies want to be sure that you will reside in the home they are considering insuring. Many times, the home is newly purchased and so the owner might not live in it yet. However, as long as you will be living in it in the near future, this is enough to ease an insurer’s worries.
Are you about to vacate the home to conduct renovations?
This question goes with a previous question regarding the occupancy of your home. While renovations in a home are a good sign for an insurance provider, as it means less chance for a claim, it can also mean your home will be vacant for some time. By asking the question, the company is trying to estimate how often your home will be empty.
Do you own recreational vehicles?
Because insurance companies also offer liability coverage, it’s important for them to be aware of the risks that exist on your property. In the event that a person gets injured while at your home, liability coverage protects your pockets in case of a lawsuit.
Recreational vehicles, such as four-wheelers, dirt bikes or go-karts, are considered to be somewhat dangerous. It increases the likelihood that someone can get hurt on your property, and therefore increase your home insurance premium.
However, just because you agree to a higher rate does not necessarily mean these items are covered. Most standard policies will not cover recreational vehicles, and additional liability insurance will be required to complete your coverage.
Do you conduct business from your home?
Most standard home insurance policies assume you do not conduct business in this home. But if you do, then extra insurance may be required. This is because running a business from home might increase the number of visitors you receive, and therefore raise your liability risk. Depending on your type of business, you may need to obtain a separate business insurance policy.
Do you have any pets in the home?
Most pets are covered in a standard homeowners insurance policy, but some breeds are not. For example, dogs that are considered ‘aggressive’ are not typically covered as they increase your liability risk. If you own one of these ‘banned breeds’, you may need to take out an umbrella policy, which provides liability coverage for damage or injury to another individual or property not covered under your home insurance policy.
Questions about your property
Do you currently have, or had, home insurance on this property?
It’s important for many insurance companies to know that your home has been insured before. No insurance might signal red flags, as it could mean you have been denied insurance in the past. If your home insurance has lapsed for some months or even years, you might find it difficult to find a new insurer.
Some companies may choose to deny you coverage or charge you a higher rate. This doesn’t mean you won’t be able to find insurance, but it could mean you’ll spend a little extra time shopping. But don’t worry. After a few months or years without a lapse, you should start to see a drop in your premium.
Do you have an empty swimming pool, diving board, skate ramp or bicycle ramp?
Similar to the previous question, these items increase your liability risk and therefore can increase your home insurance rate. However, just because you agree to a higher rate does not necessarily mean these items are covered. Most standard policies will not cover diving boards and skate ramps, for instance, and additional liability insurance will be required to complete your coverage.
Do you have an active flood policy?
Everywhere in Florida is considered a flood zone. Despite this, most standard home insurance policies do not offer flood coverage. This must be purchased separately. Many Florida homeowners opt for the federal National FloodInsurance Program.
If you do hold flood insurance, this is considered a good thing by many home insurance companies, as it adds an extra layer of protection. It may also result in a discount.
Is your home within 300 ft. of a commercial/non-residential property?
Zoning laws and plans for development can negatively impact neighborhoods when mixed with commercial buildings. For example, the city can be planning to build a road alongside the home which will increase your liability. Vacant commercial buildings around your home can increase the chances of vandalism as well.
Was your home converted into a private residence?
It’s not uncommon for old buildings to be converted into something new. Often, commercial spaces get transformed into beautiful private residences. The reason insurance companies ask you this is because there may be more liability risks for the home depending on how the space was used as before. The company will do an inspection on the property once coverage has been bound.
Do you have an oil/fuel tank on your property?
Homes with onsite oil or fuel tanks can be very hard to insure. This is because a leak could cause extreme damage, which is super expensive to repair. The best way to get insurance would be to first remove the oil/fuel tank and then apply again for coverage.
Is your home at risk of flooding/bush fire/landslide?
Depending on your home’s location, your risk of flood, bushfire and landslide damage can increase. But being aware of these risks are just one part of the solution. Having adequate home insurance is more important than ever to protect you, your family and your belongings. Having these risks may increase your insurance premium, which is why many carriers ask about them.
Does your home have a covered porch?
If you have a covered porch, you may need to double check that it’s covered in your home insurance policy. Covered porches are extremely susceptible to wind damage. In fact, many carriers in 2004 stopped providing coverage for covered patios and carports. So, if you have a covered porch, it’s worth making sure it’s included in your policy.
Is your home located close to the ocean?
Living close to the ocean in Florida is like a dream come true. That is, if you don’t mind paying a fortune for home insurance. Living close to the ocean puts your home at higher risk for flood and hurricane damage. Many carriers avoid insuring coastal homes altogether, while others charge a pretty buck for it.
Are there any parts of your home that are currently damaged?
Insurers are also interested if you’re not renovating. Un-repaired damage in a home is likely to cause an insurer to increase a rate or refuse to provide insurance a tall. It’s important to ensure all damage in a home is fixed before applying for home insurance, they will do an inspection on the home after binding the policy.
Does your home have third-party interest?
When someone else needs to know about your insurance, it’s known as third-party interest. These parties can include a family trust, mortgage company, or homeowner association. They can be added to your policy documents.
Do you have a mortgage on the home?
Lastly, insurance providers need to know if you own your home outright, or if you have a mortgage on the home. If you have a mortgage and an escrow account, part of your monthly payments may be going toward paying your home insurance premiums. In order for your insurer to charge the correct account, it will need to know about your mortgage provider.