By Kelly Fantetti, Esq.
In the last few years, while Florida property insurance rates have skyrocketed, property insurers have been strategically carving out coverage from their policies. One prominent area where property insurers have limited coverage is for non-weather-related water losses. Property insurance companies across the State of Florida are including caps for these types of plumbing-related water losses at $10,000.00, regardless of the extent of the damage.
Hidden Water Limits in Policy Documents
Even more concerning is that these limits are not required to be on the Declarations page of your insurance policy, which is generally all that you’re provided by your insurance broker when you’re shopping for an insurance policy. As such, most homeowners don’t even know the water limit is included in their policies. Even the brokers often don’t know there is a water limit in the policy. When I was shopping for my own property insurance policy, I specifically asked my broker if there was a water limit in the policy, and the broker had no idea what I was talking about. He looked into it, and sure enough, it was in the policy he was attempting to sell me.
Coverage Reduction Without Premium Discounts
It’s equally problematic that property insurers are not required to offer homeowners any sort of premium credit in exchange for this unilateral reduction in coverage. Instead, the insurance company can simply drop this into a policy and slash what could be hundreds of thousands of dollars in coverage but charge you the exact same amount they were charging you before.
The Widespread Availability Problem
The bigger problem is that these water damage limits have become so prominent in Florida property insurance policies, that it’s incredibly difficult to find a policy that DOES NOT have a limit. Even astute homeowners who are aware of the issue may end up being forced into buying a policy that they know will only provide them minimal coverage in the event of a water loss.
What can you do?
- Check your policy. If your policy has a water limit, talk to your broker and see if you have other options.
- Check your renewals closely. Your policy may not have had a water damage limit when you first bought it, but every time your policy renews, the insurance company can slip new terms into the policy. They have to include a form giving notice of the changes with the renewal package. Make sure you’re looking at those changes closely each year if your policy is renewing.
- Call your representatives. This is a problem that our legislature needs to address.
If you need help determining water damage limits in your Florida property insurance policy, it’s best to contact an experienced property insurance lawyer to help guide you.