Insurance tips
If you're obtaining a loan, your lender will require you to purchase hazard insurance and specify minimum policy limits and hazards to be covered. Florida law does not require home owners insurance for cash buyers but it is always a good idea to insure your investment.
Whether you are financing the purchase or buying with cash you will want to purchase enough insurance to cover 100 percent of the cost of rebuilding your home should it get damaged or destroyed.
You need insurance to cover the following:
The structure of your home.
Your personal possessions.
The cost of additional living expenses if your home is damaged and you have to live elsewhere during repairs.
Your liability to others.
You may be able to save hundreds of dollars a year on homeowner's insurance by shopping around.
It's best to get quotes from at least four different companies that offer homeowners insurance coverage such as State Farm, USAA, Nationwide Mutual, Allstate and Liberty Mutual. You can check out the insurance company's financial health at ambest.com or standardandpoor.com.
You can also save money with these tips:
Consider a higher deductible. Increasing your deductible by a few hundred dollars can make a big difference in your premium.
Ask about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing materials. Persons over 55 years of age, long-term customers, or those with other policies at the same insurance provider be given discounts.
Insure your house, not the land under it. Disasters damage homes, not the land they sit on. Subtract the value of the land when deciding how much coverage to buy to avoid paying too much.
Standard homeowner’s policies provide coverage for disasters such as damage due to fire, lightning, hail, explosions and theft. They do not cover damage caused by lack of routine maintenance. For example if during a storm a healthy tree has fallen due to the wind, the insurance will cover it. However, homeowners insurance usually won't cover a loss caused by negligence or a maintenance-related issue. So if the tree was rotting and ready to fall down before the storm, homeowners insurance likely would not cover the damage the tree caused to your home.
Flood insurance
If the house you are buying is in a flood zone, your lender will require flood insurance in addition to hazard insurance.
Flood insurance rates are based on flood zone maps developed and revised by FEMA and can be anywhere from $200-$2,500 and more a year. You can reduce flood insurance rate by ordering elevation certificate. Most insurance companies compute the rate for flood insurance based on the worst case scenario; that is, the highest possible rate. However, if the house is elevated above the level at which the government has determined that flooding is probable, the insurance company will use elevation information to compute a lower rate.
Sinkhole insurance
Sinkholes are depressions or holes in the ground that are caused by the collapse of a surface layer of soil. These holes can vary greatly in size and depth. Small ones may cause foundation problems, while larger ones can lead to the collapsing of an entire structure.
In Florida, insurance companies are required to provide homeowners insurance coverage that includes damage from “catastrophic ground cover collapse.” They are also required to offer sinkhole damage coverage as an option, and it generally appears in a rider that comes at an additional cost.
By Law the Seller has to disclose any knowledge of defects to the Home, including sink holes. Not in all cases you can count on sellers to provide you with the objective property report, if the seller is an investor and has never occupied the property you may have to do the research yourself. Ask your agent to provide you with detailed property report. The information about sinkholes can be found on public property records, if an engineering report has been made, a permit had to have been filed.
You can look up reported sinkholes activity in the area by searching property address on a map.