Homeowners Insurance

Could you replace your home if it was destroyed? What would you do if you had to vacate your home for a year while you rebuilt it? What are your homeowner’s policy provisions for: actual reconstruction costs, temporary living expenses and contents replacement? What coverage do you have for liability if someone gets hurt on your property, your dog bites someone or a kid at school points his finger at your son who grabs it and breaks it? His parents are threatening a lawsuit.

If you live long enough you might find out about all those things.

Simply your homeowner’s policy probably doesn’t have much coverage for liability. You might think about an Umbrella Liability policy. In these days people want more than say $5,000 for the dog bite or the broken finger.

As to replacing your home: remember the reconstruction of your home might be a lot less than appraised value. Your lot might be worth a great deal more than your house.

A story might better answer some of these questions.The following is a true story.

He had been playing golf. It was a beautiful summer day that Saturday August 22nd 1992 but it was hot and muggy when they finished. He was happy because he’d won $4 playing golf but more important he was going home to a house that he had finally finished painting.

He had started painting the house in May and worked on it every chance he got. First he pressure cleaned the outside of the house. Then he re-caulked all the joints discovering that some joints had never been caulked at all. Then he painted all the high trim and eaves the same gunmetal grey it had been. It was slow laborious work going up and down the ladder with paint pail and brush. Then he painted the exterior walls white. He had to contend with the wasps trying to rebuild nests that he had pressure cleaned away and the mosquitoes were ferocious that summer. It was brutally hot and humid. Homestead Florida is on the eastern edge of the everglades and seven miles from Biscayne Bay. From June to September it is home to several hundred billion mosquitoes.

When he had finished painting the outside it was July and he and his wife started on the interior removing wallpaper with the steam iron and re-spackling the drywall surfaces. They rented a sprayer for the ceilings but did the walls with rollers and brushes. She bought new drapes for the living room and just last Sunday he had repainted the last of trim in the living room a slightly pinkish color to match some little dots in the new drapes.

When he walked in the door she was in a tizzy about something. She was bagging things up in plastic garbage bags.

“What’s up?” he said.

“Hurricane’s coming right at us!”

He turned on the weather channel and there it was: Hurricane Andrew, the first named storm of the season. It wasn’t a huge storm like Hugo that had covered most of the Southeast. It was compact and moving quickly on the radar and yes it was headed straight at South Florida. The weatherman was describing the storm and noted that a high pressure area just to the north was keeping Andrew on track to hit South Florida. It was a category three storm and it was approaching the warm waters near the Bahamas and the Gulf Stream. The weatherman speculated that it could be a category 4 or even a 5 by the time it made landfall.

Our painter/golfer had never lived through a direct hit by a hurricane but she was born in Florida. She knew hurricanes. She started barking orders and he did what he was told. Everything that could be damaged by water was bagged and placed up high. There was an incredibly sturdy huge shelf he had built in the garage. Everything of tangible value was put in the cars: a ford explorer and a Cadillac. By the next morning everything they could do was done. Suitcases were packed for a one week trip and last but not least the three cats and two dogs were crated for transport. Before she left the house she took the video camera and taped the entire house room by room. On the microphone she described all the contents even commenting that her lingerie had been purchased at Victoria’s Secret and it was expensive.

“Where are we going?”

“North! Follow me!”

When they joined the traffic on Route 27 following was easy. It was bumper to bumper all the way to Starke Florida where they finally found a motel with a vacancy.

Early Monday morning they watched Andrew come ashore on TV. Theirs was probably the first house in Homestead to be hit by the western edge of the eye wall.

They were about to learn all about Homeowners insurance.

In the days and weeks that followed they lived in motels and hotels. Upgrading and moving south as best they could. The dogs moved from kennel to kennel. They saved all the receipts of every kind.

Six days after the storm had passed they visited the house. If they didn’t know the area they would have never found it. There were no street signs left. Nothing that had been vertical remained. The devastation was total. Every tree, every power pole, the Radio/TV tower were all laying flat on the ground. Every house and building was flattened or ripped to shreds. Clay roof tile and shingles littered the entire landscape. Even the grass seemed to have been blown away. It was eerie because there were no sounds: no birds, no traffic nothing. The house was still standing but it was gutted. The shocker was that the fine china in the big old china cabinet was still displayed as before. It was absolutely the only thing in the house that wasn’t destroyed. Everything else was sopping wet and covered with fiberglass lint from the insulation.

It was weeks of motel living before they found Prudential Insurance’s makeshift office. They were living on credit cards and checking account cash. Prudential was issuing temporary living checks. Their agent, Bob Kelly was sitting at a folding table outside the gutted building his office had been in. He too had been a Homestead resident but now he was living in his condo near Jupiter 120 miles north.

Thanks to Bob they found out they had all the insurance they would need. Their policy covered replacement of the house up to a maximum of $150,000 actual cost to reconstruct. All the contents to a maximum of $100,000 were also covered.

Get me a list of everything that was in the house and any pictures you might have Bob said.

“I have a video” she said.

“Good! All temporary living costs are covered up to $15,000 of actual expenditure” said Bob.

“Keep your receipts” he said. “When you find a place to rent we will give you a check to cover all rent for 12 months up to another $15,000.”

Bob had done right by them. They had their home owner’s policy, automobile coverage and even a $1,000,000 general liability umbrella policy with Prudential and Bob.

It would be a long road back but they had the financial means thanks to good insurance. Others were not so lucky. Lots of people had no temporary living money and many could not rebuild with the value they had indicated in their policy. Others had no flood insurance and although Andrew had been a relatively dry hurricane the storm surge had flooded a lot of the coast and it rained like hell the following week.

A few years after hurricane Andrew, Prudential sold its Property and Casualty business.