Florida homeowners insurance
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Limits Placed On Homeowners Insurance Policy Coverage
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It is up top you to choose the level of cover you require on your homeowners insurance policy and these limits, along with the deductible on the policy, determine how much the premium on your insurance policy is going to be.

When it comes to selecting the level of cover you want you must look carefully at what your policy will pay out in the event of a claim and we discuss this separately when looking at different types of homeowners insurance plan coverage. This said, certain parts of your policy will depend upon the total sum insured for your dwelling. As an example, it is usual for plans to pay out 10% of the dwelling coverage limit for other structures, 50% in respect of personal items and 20% for the loss of use of your house.

Furthermore, there will often be separate limits for the replacement of high value items and if you need cover for these items then you will have to pay an additional sum for an endorsement or floater (also referred to as a rider) to your policy.

Usually you will have to pay more for the following:

  • High value items such as jewelry, furs and silverware


  • PCs and other home office equipment


  • Waterbeds


  • Business assets when you are running your business out of your home


  • Hurricane, earthquake and flood damage (depending on location)

You should review the limits on your policy at least once a year and want to make sure that it does not drop below 80% of the replacement cost of your property. If it does drop below this sum then there is a danger that your insurance firm will reduce the sum that it will pay out against a claim.

Please note:

  1. The market value of your property and its replacement cost are very different figures and you out to insure your home for the replacement cost and not the market value.


  2. The deductible on a plan is the sum of money which you pay out of your own pocket for a claim before your policy comes into play to meet the claim. The higher the deductible the less the insurance firm will need to pay out and so the cheaper your policy premium.
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