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The Insurances of a Property.

Posted by Helena Grossberg on July 27, 2014
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In the process of purchasing a property in Florida, sometimes it is mandatory to get an insurance policy.

Homeowners Insurance, or HOI, typically covers a property against losses of contents, loss of use, as well as personal liability, in case some accident happens inside the property.

Things can get complicated when one starts defining the value of the property and its costs. The policies typically cover “all risks,” but it is important to outline these risks. Many times, they include events that rarely happen in Florida, such as an earthquake, volcanic eruption, nuclear explosion, or vandalism. Make sure that the policy cover real events, and that the agent is licensed and a member of the National Association of Insurance Commissioners.

When a bank finances a property, depending on the value of the mortgage, they might request homeowners insurance. There is also a second insurance that they might offer, to protect the loan against non-payment. This is not the PMI, or Private Mortgage Insurance, that the banks might still charge for those who finance more than 80% of the value of a property.

There is yet another type of insurance for those who rent a property, called Renter’s Insurance, protecting the tenant’s belongings, and providing liability insurance in case of an accident. Some buildings require all residents to carry insurance.

Home Warranty is an insurance that covers appliances in a home, should they fail to work. It can cover all appliances or just a few of them. This service can be transferred to the new owner at closing.

Each insurance contract has different clauses, and they must be reviewed carefully to ensure that it serves its purpose. Some features that the property has might also lower the cost of insurance, such as an alarm, shutters, or security at the front desk.

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