Florida homeowners: private insurers inflate replacement costs

Florida homeowners have started to dread receiving their homeowners’ insurance bill. One homeowner in Florida was shocked to see that his homeowners’ insurance company increased his total replacement cost value of his home by $57,000 in one year. The homeowners’ insurance value is almost double what it would take to rebuild this two-bedroom, 950 square foot house.

Many homeowners in Florida have seen their homeowners’ insurance premiums increase within the last year due to the insurance company increasing the total replacement cost value of their homes.

Another Florida homeowner has been paying $250,000 worth of insurance for a home valued at just $140,000. Many homeowners are claiming that private insurers in Florida are insuring homes at a higher level than what they are worth, which results in higher premiums for the homeowner.

There are many more homeowners who are in the same situation where they are being forced to pay insurance premiums on policies that are increasing their total replacement cost value, sometimes double what their home is worth.

In response to homeowners’ complaints, one private insurance company spokesperson said that every company uses different software to estimate the replacement cost of a home so values may vary.

Homeowners should make sure they remain educated on how much their home is really worth. Homeowners are able to request a replacement cost adjustment with a certified replacement cost appraiser but this can be costly and there is no certainty that the new appraisal will change your insurance company’s replacement cost value.

State legislators said that stop private insurance companies from doing this, a bill would need to be passed that would allow the Office of Insurance Regulation more oversight and control over private insurance companies.

Source: 10 News, “Florida homeowners claim private insurance companies inflate replacement cost values, ripping them off,” Feb. 10, 2012

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