8 Insurance Policies You Need in Florida
Without a doubt, the question I’ve heard the most over the past 17+ years of my insurance career in Florida has been “How much coverage do I need?” The correct answer is always “you should purchase as much coverage as you can afford”, which unfortunately doesn’t offer an easy, cookie-cutter solution to follow. It requires figuring out your family’s budget and determining how much can be realistically allotted for insurance.
Just like planning a budget, insurance can be difficult to figure out. With terms like coverage limits, deductibles, exclusions, limitations, and endorsements, figuring out what is a good policy and what is right for you can be hard to determine. However, it is an absolutely necessity in order to protect you, your family, your hard work, and your assets so you can plan for financial success.
While you cannot control what is going to happen in life, you can transfer the risk and the financial impact it can have on you–which is the exact purpose of insurance. If someone hits your car, a pipe bursts in your home, or you have a medical emergency, insurance can save you a lot of money and headaches if you properly planned ahead of time. Nobody wants something bad like this to happen, but if it does, we are all more than happy to have insurance cover the claim instead of paying for it out of our own pocket.
So back to the question, “How much coverage do I need?” There are EIGHT types of insurance policies here in Florida that are absolutely necessary to have.
- Homeowners Insurance
This policy will cover your home, any structures on the property (i.e.: fence, shed, pool, screen enclosure, etc.) and your personal property in the event of a sudden or catastrophic loss. Most importantly, your policy should come with personal liability coverage, which will cover any accidents that happen on your property and can protect you against someone trying to sue you. Remember, a home insurance policy is not a maintenance plan.
- Auto Insurance
The most important part of your auto insurance is to make sure the liability limits for Bodily Injury and Property Damage are as high as you can afford. These two coverage’s are going to pay for the damage you cause if you are ever at fault in an accident. Uninsured Motorist coverage is also an important part of your policy as it can pay for what you are legally entitled to recover from the at-fault party in the event they have no insurance or insufficient insurance to cover your loss. Make sure to carry this important coverage at the same limits as your Bodily Injury liability limits, and stack the coverage.
- Flood Insurance
A flood is defined as naturally rising water. This peril is not covered under most home insurance policies, but there are some companies that are offering this protection by endorsement. Either way, make sure to cover this peril—even if you think you don’t live in a flood zone. Truth is, all of Florida is in a flood zone and 40% of all flood claims come from low-risk flood zones. If you are not too worried about your home being washed away because you don’t live close to water, look into carrying a minimal amount of protection to cover floors and furniture. Some coverage is certainly better than none.
- Umbrella/Excess Liability Insurance
An umbrella policy is an extra layer of liability insurance that can sit over top of your home, auto, condo, rental properties, boat, etc. Coverage starts at $1,000,000 and can be increased to any limit you may need. If the settlement from a liability claim exhausts the limits of your underlying policy, the umbrella policy takes over paying for those damages instead of you. Most people tend to think these policies are expensive and only for the wealthy, but the truth is that premiums can start as low as $150/year. If you have over $100,000 in assets or your combined income for your family is over $90,000 per year, you should absolutely consider this coverage.
- Life Insurance
You need life insurance; it’s just that simple. You must make sure that you and your spouse are covered in the event something tragic happens. This isn’t a fun topic because you have to think about how life is going to continue to go on, but you have to plan how your family will continue if one (or both) of you pass. Make sure you both life insurance policies and each policy has enough coverage to pay off all debts AND at least 5-10 years of your current annual salary.
- Health Insurance
Never, ever, ever go without health insurance. Check out all of the various options that are available and determine which one best fits you and your family. Make sure to carefully look at the deductible, co-pay, and max out-of-pocket each plan offers along with if your current doctors are considered in-network and your current prescriptions are covered. You’ll also want to find out which local hospitals are covered and which are not.
- Disability Insurance
This policy replaces a percentage of your income in the event you become disabled and are unable to do your job. Make sure your policy covers at least 65% of your income and defines disability as the inability of doing your OWN occupation instead of ANY. This way, your policy will pay out if you can no longer perform your job instead of any job.
- Long-Term Care Insurance
This usually isn’t a high priority until you turn 60, but as soon as you do—BUY IT! According to the American Association of Home and Services for the Aging, 69% of people will need some form of long-term care after age 65. If you become ill, it ensures that your spouse will have enough money to eat and your children won’t be burdened with high payments. If you have parents who can’t afford LTC insurance and you can, buy it for them! You may not be able to put a bow around it and give it as a Christmas present, but it is an absolutely necessary coverage to protect the nest egg you work your whole life to build from the costs of homecare specialists and nursing homes.
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