With the hurricane season in full swing, some homeowners and property owners may not understand all the components in their property insurance policy.
An insurer issuing a residential property insurance policy must provide the option for hurricane or windstorm coverage and additionally, an option for the policyholder to clearly exclude that coverage. As for insurable interests and subject matter, insurance can cover both intangible and tangible interests on the property, such as the income that would be derived from the property. The insurance policy must specify the types of risks covered, and some provide “all-risk” protection while others provide “specific peril” protection, which the latter lists the types of causes covered in the contract. The term “all-risk” can be a misnomer though, as the policy may still have exclusions listed, such as not protecting against flood damage or windstorm damage.
For a deductible, there is a statutory regulation (F.S. 627.104), requiring that a policy with a separate hurricane deductible must include as follows:
THIS POLICY CONTAINS A SEPARATE DEDUCTIBLE FOR HURRICANE LOSSES, WHICH MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU.
As for damages, the policy can either provide replacement cost coverage, up to the policy limits for the dwelling. Alternatively, the policy can provide for the recovery of replacement costs, such as costs in relation to the regulations surrounding the construction (costs for conform to local ordinances) or repairs or the cost to tear down the property and remove the debris. This can also be clearly excluded.
The insured (property owner) can dispute and reject the amount tendered by the insurance company. Because there are so many contested claims, there is a mediation route that can be used by the parties to avoid litigation and settle the amount in dispute. This can be done before and after initiation of a lawsuit.