What Homeowners Insurance Covers: A Guide for Saint Petersburg

If a storm damages my house, will my homeowners insurance pay for it? It's one of the first questions first-time buyers ask, and the honest answer is: it depends on what caused the damage and how your policy is written.

This guide walks through the usual parts of a homeowners policy, what a standard policy tends to leave out, and a few ideas that trip up new buyers, like replacement cost and deductibles. Here in Saint Petersburg, where wind, heavy rain and flooding are real concerns, it pays to know these things before you sign for a mortgage.

The main parts of a homeowners policy

A standard homeowners policy is really several kinds of protection bundled together. Each part covers something different, and each has its own limit, which is the most the policy will pay for that part.

• Dwelling: This pays to repair or rebuild the house itself, including the walls, roof, floors and anything permanently attached.
• Other structures: This covers things on your property that aren't the house, such as a fence, detached garage or shed.
• Personal property: This covers your belongings, like furniture, clothing and electronics, if they're damaged, destroyed or stolen.
• Loss of use: If a covered loss makes your home unlivable, this helps with extra costs like a hotel and meals while repairs are done.
• Personal liability: If someone is hurt on your property and says it's your fault, this helps cover legal costs and what you may owe.
• Medical payments to others: This pays small medical bills for a guest who gets hurt at your home, no matter who was at fault.

What a standard policy usually leaves out

Here is where many new owners get surprised. A standard policy covers a lot, but it does not cover everything. Some common exclusions, meaning things the policy won't pay for, include:

• Flood: Rising water from storm surge, heavy rain or an overflowing river is generally not covered by a standard policy.
• Earthquakes: Damage from shaking or the ground moving is typically excluded.
• Wear and tear: Insurance pays for sudden damage, not for a roof that simply got old or a pipe that slowly corroded.
• Pests: Termites, rodents and similar problems are usually seen as a maintenance issue, so they aren't covered.

Some of these gaps can be filled. Flood coverage is usually sold as a separate policy. Other gaps can sometimes be handled with an endorsement, which is an add-on that changes your policy to cover something extra. Because flooding is a known risk near the water, it's worth asking about even if your home isn't in a high-risk zone.

Replacement cost versus actual cash value

When something is damaged, your policy can pay in two main ways, and the difference matters.

• Replacement cost: This pays what it costs to replace the item or repair the home with new materials, without taking off for age.
• Actual cash value: This pays the replacement cost minus depreciation, which is the loss in value from age and use.

Say a ten-year-old roof is damaged. Under actual cash value, you'd get less because the roof was already ten years old. Replacement cost pays closer to what a new one costs. Many people prefer replacement cost, though it can change the price of the policy. Ask how your policy handles both your house and your belongings.

Insure for the cost to rebuild, not the sale price

A common mistake is insuring a home for what it would sell for. That number includes the land and the neighborhood, and neither of those burns down or blows away. What your policy needs to cover is the cost to rebuild the house itself.

Rebuilding costs depend on labor, materials and the size and features of your home, and they can change over time. After a big storm, when many neighbors need repairs at once, those costs can climb. Ask your agent to help you estimate a realistic rebuild amount, and review it now and then, especially after you renovate.

How deductibles work, and who can help

A deductible is the amount you pay yourself before the insurance company pays the rest of a covered claim. If your deductible is a set amount and your covered loss is larger, the policy pays the difference, up to your limit. If the loss is smaller than the deductible, you'd pay it all.

A higher deductible can mean a lower premium, which is the regular amount you pay for the policy, but it also means more out of your pocket when something goes wrong. Some policies use a separate, often percentage-based deductible for wind or hurricane damage, so check how yours is set up.

LFG is an independent insurance agency in Saint Petersburg. Because we're independent, we compare options from several insurance companies and can walk you through what each policy covers and leaves out. We also help with auto, life and health insurance, and you may qualify for discounts when you bundle.

Common questions

This guide is general information, not legal advice or a promise of coverage. What's covered depends on your policy's terms and the insurance company's approval.