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How Florida Property Insurance Work?

How Florida Property Insurance Work?

All You Need to Know About Florida Property Insurance

Are you thinking about buying a home in the beautiful state of Florida?  If so, congratulations! Buying a house is one of the biggest investments you can make in your future. Before you finalize your purchase, it’s essential to understand what insurance coverage you need as a homeowner. That’s why we’ve put together this handy guide to help you understand everything you need to know about property insurance as a new homeowner in the great state of Florida. 

What is Property Insurance?

Property Insurance is a type of insurance that protects your assets from financial loss due to unforeseen circumstances such as natural disasters, theft, and damage from fire. If you own a home, a home equity line of credit, or any other form of real estate, it’s important to understand that property insurance is mandatory in most areas. If you don’t have property insurance, you could be held financially responsible for any damage caused to your property. That’s why it’s essential to have adequate property insurance to protect your assets. If you have a mortgage, your lender will require you to have adequate coverage. In case you have a mortgage and aren’t sure how much coverage you need, be sure to contact your mortgage lender. Your lender will be able to help you determine the amount of coverage you need to protect your assets.

Types of Property Insurance

Property insurance is generally broken up into 3 categories: 

Homeowners Insurance 

This type of insurance covers damage to your home, loss of its contents, and other structures such as detached garages or carports. Homeowners insurance is mandatory for people who have an ownership interest in a residential property such as a house or condo. Homeowners insurance is also referred to as HO-3, HO-4, or standard homeowners insurance. Homeowners insurance is an all-purpose policy that covers both the structure and its contents. Homeowner's insurance is necessary because houses can be destroyed by floods, tornadoes, hurricanes, termites, etc. Household goods can be lost by fire, theft, or other hazards.

Renter’s Insurance  

Renter’s insurance covers damage to the building or property belonging to the landlord. It does not cover damage to your personal property. If your landlord’s property is damaged, you could be held responsible for paying for repairs. If you have renter’s insurance, your insurer will cover the costs. Renter’s insurance is necessary because landlords’ properties are covered by their own insurance while you are responsible for damage to your personal property. 

Condominium Insurance 

Condominium insurance protects against damage to your unit, the common areas, and other units in the building. If you have condo insurance and the building is damaged, your insurance will pay to repair the damage to your unit. Renters who own items that they don’t want to be responsible for, such as hot tubs, pools, or wall-mounted TVs, should consider condo insurance.

Important Terms to Know

  • Replacement Cost - This is the amount of money it would take to rebuild your home today, based on current building costs. If you have replacement-cost coverage, your insurer will pay you enough to replace your home with a house of similar type and value.
  • Actual Cash Value - Actual cash value is the amount of money it would take to replace your home if it were new, less any depreciation.
  • Deductible - A deductible is the amount of money you agree to pay out of pocket each year before your insurance company starts paying for repairs or replacements.
  • Dwelling - A building that contains one to four units. If your building has more than four units, it is considered a multi-unit building.
  • Personal Property - Household items such as furniture, electronics, and clothing.
  • Liability - The amount your policy will pay if you’re sued and lose your case.

Why Do You Need Property Insurance?

If you don’t have property insurance, you could be held financially responsible for damages to your property. An example of that would be if you don’t have property insurance and a fire breaks out and damages your home, you will be required to pay for repairs yourself. If you have adequate insurance, your insurer will reimburse you for damages up to the amount of coverage you have. Property insurance is a financial safety net that safeguards you from financial loss due to unforeseen circumstances. 

With property insurance, you can rest easy knowing that your insurer will be there to protect you from the financial burden of paying for repairs to your home. Additionally, property insurance is mandatory in almost every city and state. Imagine not having adequate insurance coverage and disaster strikes, you could be fined or even forced to vacate your property!

How Much Does Florida Property Insurance Cost?

The amount of property insurance you should buy will depend on several factors. If you have a mortgage, your lender will require you to have a certain amount of insurance coverage. The amount of coverage your lender requires will depend on a few factors, including the amount of your mortgage and the value of the property. If you own your property outright, you should have enough coverage to rebuild your home, including the cost of all construction materials. Remember,  you can use an online calculator to help you determine how much coverage you need.

When Should You Buy Property Insurance?

When you own a home, you should purchase insurance as soon as you close on the property. If you wait until you’re in a crisis, you may be unable to get any coverage. Should you not be ready to buy homeowners insurance, you can sign up for a homeowner’s insurance policy and pay a small amount of money for what’s called a “builder’s risk policy”.  A builder’s risk policy will protect you from financial loss due to unforeseen circumstances such as flood damage or fire until you’re ready to purchase a full-coverage policy.


As a homeowner, it’s important to understand the importance of adequate property insurance coverage. Without enough coverage, you risk losing everything you own if a disaster strikes. If you have a mortgage, your lender will require you to have adequate insurance coverage. 

If you have questions about how much coverage you need, be sure to speak with your insurance provider.