Why Policy Endorsements Matter
By Gregory Greenberg
Many times when you’re purchasing or renewing your homeowner’s insurance policy, you’re presented with a number of options that are advertised as ways to save you money or allow you to purchase special coverage that you otherwise wouldn’t have. There are an endless number of possibilities but a few common examples are allowing your insurance company to select a preferred vendor to do the repairs in the case of a loss, limitation on how much your insurance company will pay for mold, or a limitation on how much you can be reimbursed for damage to a pool cage.
A recent trend that has been troubling is the number of endorsements limiting how much your insurance company will pay for expensive losses such as water losses and endorsements that try to limit your recovery to “actual cash value” rather than replacement cost value. In Florida, pursuant to Florida statute 627.7011, insurers are required to offer you the cost of what it would take to replace damaged items (“replacement cost value”) rather than what they are worth at the time of the loss (“actual cash value,” or generally the value at the time of the loss minus depreciation). Pursuant to statute, an insurance company must obtain written consent before they can offer an actual cash value insurance policy. Troublingly, some insurance carriers have begun offering endorsements to reduce policies that would otherwise be replacement cost value to actual cash value. These endorsements are marketed to insureds as a way to save money but may well end up costing you in the long run.
The long and the short of it is that you have to read the fine print and make sure you make informed decisions regarding your homeowners’ insurance that are right for you. Although some of these new endorsements have not yet been tested in court, you don’t want to be the guinea pig. Insurance companies are not in the business of saving you money; they are highly sophisticated businesses that use massive amounts of data to make themselves as profitable as possible. Make sure you read the fine print and do your research each time you renew or purchase a new policy.
If you have any questions regarding this, you can call our office 24 hours a day at 407-478-4878.
Gregory Greenberg, Esq.
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