In a recent opinion piece by Ross Buchmueller, CEO of Privilege Underwriters Reciprocal Exchange (PURE), Florida high-value homeowners should review their insurance options with great care over the next year with changes to the state program. 

A thorough review of the current homeowner’s policy should go well beyond premium dollars alone.  It will be important for homeowners to have the support and advice of a private risk management expert to help them review the differences between coverage types and carriers.  This will ensure the piece-of-mind to know that if a claim occurs the homeowner has a policy and support behind them to financially recover from the event.

Certain state programs are limited in what they cover, and without conducting a thorough review, a homeowner may be taking on risk they are unaware of or not prepared to undertake.  During an evaluation, a private risk expert will take the following into consideration as they guide the homeowner in determining the best coverage and carrier for their specific situation:

Current Home Appraisal – The need for an expert cost-to-rebuild appraisal on the property and dwelling is important; especially if it is a custom-built home or if modifications have been made that make the home unique.  Gauging the impact of these changes on coverage and understanding the challenges to rebuild the property will ensure the policy in place covers a homeowner’s hard work and investment in their property.

Home Inspection — A complimentary in-home inspection, to the specifications of the insurance company, may uncover opportunities for premium savings based on the modifications made to the home, wind mitigation, electrical upgrades, smoke, fire and theft systems, etc.

Coverage Review – The appraisal and home inspection will identify the cost to replace and any premium credits available to the homeowner.  An understanding of the limits and what coverage is necessary for the specific property, other structures and its contents is also important.

Carrier Review (Part 1) – Once a private risk expert has a thorough understanding of the home and property, the deductible or financial risk a homeowner is comfortable with undertaking, the expert can then guide the homeowner through the process of determining the best carrier for their specific situation.  Each carrier and/or coverage may be different depending on the location of the home, distance to water or sinkhole areas, age of property, percentage of home which is masonry versus frame, style and age of roof, hurricane mitigation, etc.

Carrier Review (Part 2) — The carrier review should include a thorough understanding of their financial leverage and liquidity (i.e. ability to and how fast they pay on a claim) beyond the due diligence and high standards of major rating agencies (A.M. Best, Standard & Poor’s, Moody’s and Fitch).  If a hurricane, fire or other event happens that impacts your property and your family, how fast will you have your claim handled and for how long will you have to fund your recovery out-of-pocket until your claim is processed?  How well will the carrier be able to service the policy and what additional support can be provided through the private risk division of the agency you select.  Many of the top carriers have hurricane protection units which provide complimentary temporary mitigation to your home post storm.

The support and advice of a private risk insurance expert ensures financial and emotional piece-of-mind.

DISCLAIMER: Because of the generality of this update, and based on particular situations, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice, financial advice and/or the advice of a licensed insurance or certified human resource professional.

© Connelly, Carlisle, Fields & Nichols 2012