If you’re trying to find Florida home insurance for your new or existing home, you should make sure that you understand exactly what is covered by home insurance, and the limits on liability that any particular policy might offer before shopping around for the best prices.
Understand PITI Before Buying A Home
When buying a new home, lenders, brokers, and other interested parties refer to PITI when calculating the ability of a homebuyer to purchase and finance a home. PITI stands for Principal, Interest, Taxes, and Insurance. Principal and interest are the amount of the house’s mortgage, plus the interest that will be accrued over the life of the loan, and then divided by the total of all the payments.
Taxes refer to the property tax due per year, divided by twelve months and added to the principal and interest. Insurance refers to homeowner’s insurance on the property, and is generally calculated based on an average for the location and the dollar figure of the purchase price. Because it’s possible to pay much more than this figure, it’s wise for prospective home buyers to look into the actual insurance costs on the property they might buy as carefully as any other aspect of their total cost.
Florida home insurance rates can vary a great deal from insurer to insurer. There are many circumstances where you might pay much more for insurance than the minimum requirements. Its important that you understand why.
Beware Flood Insurance Surprises
It pays to investigate whether a home you’re thinking of buying is in a flood zone, and what Flood Insurance rates are in that community. Look out for big surprises when you finally go to purchase a flood insurance policy that was originally based on a PITI estimate. There are many different types of flood zones.
They’re calculated on many criteria, including the elevation of your house above sea level, a number that’s difficult to find on many realty house listings. You might find yourself saddled with a flood insurance bill that’s many times more expensive than your regular Florida home insurance. That will not only bite you in the wallet, but it could also possibly make it more difficult to sell your home in the future, too.
Also be aware that most mortgage lenders don’t consider flood insurance optional. If you’re in a flood zone and have a mortgage, your lender will require that you purchase flood insurance. If you dont they will purchase it for you, often at rates even higher than if you purchased it on your own.
You Might Want More Than Bare Minimum Coverage
Of course lenders will also require that homeowners have regular hazard insurance in force at all times on a home with a mortgage. While lenders are less stringent about the amount of this insurance than they are about the amount of flood insurance you’re required to carry, there will be minimum policy limits you’ll have to carry. Be careful when purchasing a policy that covers only the minimum limits required by your lender.
Florida home insurance quotes found here won’t be geared only to the needs of the lender. If not it probably wouldn’t cover your belongings or much in the way of personal liability. The lender only cares that if the house is destroyed that they will be paid for the value of the remainder on the mortgage. You could find yourself out many thousands of dollars after the lender is paid off if you’re unable to rebuild after a disaster because your insurance limits were too low.