The law allows “Floridians who don’t have mortgages on their properties…to eliminate windstorm coverage as a way to cut insurance costs” and “allows consumers to jettison coverage to replace the contents in their homes or condominiums should they be destroyed or damaged by a hurricane or fire.”
One of the first problems that popped into my head was the fact that if you drop coverage you’re no longer covered. The article addresses this issue by explaining:
“Homeowners would have to write personal statements to their insurance carriers indicating they understand they wouldn't get money to pay for hurricane repairs. And even though the new law takes effect in July, consumers won't be able to drop hurricane coverage until it's time to renew their annual policies.
Also, the exemption isn't just for hurricanes. Homeowners who choose to forgo windstorm coverage also would be without insurance money to repair or rebuild their homes should they be damaged by a tropical storm or destroyed by a tornado.”
Dropping windstorm coverage means a substantial savings for homeowners in the short run considering that “coverage to repair or rebuild storm-damaged homes typically is the most expensive part of a homeowner policy -- as much as 90 percent of the cost, depending on where you live in Florida.” Homeowners could save thousands of dollars a year by foregoing windstorm coverage.
The financial risk is significant for homeowners if their home gets hit with another hurricane or storm and they don’t have windstorm coverage. However, if premiums are too high then this option could be worth the risk.
Do you think dropping windstorm coverage is a smart thing to do?
I cannot readily think of a situation that would lead me to want to drop insurance coverage against hurricane damage in Florida, of all places! I mean, great, your house is paid off. Is it somehow hurricane proof, too?
Jerry
www.leads4insurance.com
Posted by: Jerry | September 13, 2007 9:41 PM | Permalink to Comment