July 12, 2005

Do you know what's in your homeowners insurance policy? If not, now might be a good time to find out.

"Sit down and talk with your agent," advised Sam Miller, executive vice president of the Florida Insurance Council. "A lot of times at renewal your policy comes automatically, but you should sit down and talk with your agent about your coverage."

But even the 2004 hurricane season couldn't inspire some homeowners to review and update their coverage. A survey conducted for the National Hurricane Survival Initiative in late April found that many homeowners along the East and Gulf coasts still don't have adequate insurance coverage.

The Initiative is a partnership of public and private businesses and organizations and agencies that includes the National Hurricane Center and the Florida Division of Emergency Management. The group's goal is to raise awareness about hurricane survival.

The survey also found that 40 percent of the respondents didn't know that their standard homeowners policies do not cover flooding during a hurricane.

A 2004 Harris Poll found that 80 percent of homeowners nationwide know the value of their homes has risen, but only 63 percent said they had increased the amount of their homeowners insurance coverage.

In a statement, Loretta Worters, vice president of the Insurance Information Institute, a national industry group based in New York City, urged consumers to review their homeowner policy.

"Protecting your home with the proper insurance is part of responsible home ownership," she said. "That means reading and understanding your policy, and getting additional coverage if you've made changes or additions to your home."

Many homeowners in hurricane-prone areas also don't know the amounts of their hurricane deductibles, Worters added.

Some areas in Florida sustained property damage from more than one storm, and homeowners faced multiple deductibles on their insurance coverage.

That problem was remedied when Gov. Jeb Bush signed into law new legislation that provides a number of consumer protections, and a major one is the single season hurricane deductible that applies to all policies written or renewed as of May 1, 2005.

Last year, many homeowners were having to pay the higher premium deductible - usually 2 percent of the insurance policy limits -more than once for damages stemming from multiple storms, said Miller.

"This hurricane season, homeowners have to satisfy just one total hurricane deductible, then after that the 'all other perils' deductible kicks in, which usually is about $500," Miller said.

Additionally, in the past replacement cost coverage meant the homeowner would get full replacement costs only after replacing the item lost or destroyed, according to Miller. The law now requires insurers to pay replacement cost benefits upfront, regardless of whether the insured uses the money to buy a new item or spends it on something else.

A wealth of general information about homeowners insurance is available free from a variety of sources. Here are a few: Florida Department of Financial Services, Office of Insurance Regulation, www.fldfs.com, (800) 342-2762; The Florida Insurance Council's Hurricane Central Web site, www.flains.org; and the Insurance Information Institute, www.iii.org.