Question:

How much hazard insurance (homeowners insurance) policy do I need if I live in Florida?

Answer:

When you consider how much coverage you need for your hazard insurance if you are a Florida resident, take into account several factors. With all the hurricanes around there are some additional calculations to make on top of all existing regular considerations.

Hazard insurance premiums covering property replacement cost will be higher compared to actual cash value (ACV) policy premiums but if loss occurs, with replacement cost policy your house will be fully restored with adequate materials.

In regions as Florida where some property damage is likely to happen during a hurricane, homeowners may do best with extended property replacement cost policy. It will take into account that after a disaster strikes, repair services and materials costs are likely to rise due to increased demand. And this hazard insurance policy option will take this into account and usually increase the policy premium costs around 20%.

Bear in mind, you may also be responsible for a hurricane deductible - that is, the amount a homeowner will have to cover in case of hurricane before the insurance company begins to pay - for example, you may have a 1.5% hurricane deductible on your insurance limit.

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