Replacement cost coverage pays to replace or rebuild buildings and other property, as long as the property is insured for its replacement value. Actual cash value coverage reimburses the policyholder only for the depreciated value of the property. In most cases, property and liability insurance policies are sold packaged with other special coverage. For the best protection, make sure both the building and contents are covered, even though mortgage lenders generally require insurance only on the building. The FWUA windstorm pool provides policies to more than 400,000 homeowners on Florida s coasts.
Coverage is heavily concentrated in southeast and west central Florida.
When a business must close because of an insured property loss, a business interruption policy, called business income insurance, pays ongoing expenses such as rent, utilities and some or all payroll expenses. This type of coverage often makes the difference between the survival or failure of a business after a natural disaster or other event. Extra expense insurance, another type of business interruption coverage, reimburses for special expenses that help a business minimize losses by getting up and running. For example, if a business can restart operations in a week, rather than a month, by paying a surcharge to ship replacement equipment by air express, the extra expense insurance would cover the air express charge. Remember that most business interruptions occur in the first 30 days after a hurricane, tornado or other event, so it is important to get a policy that kicks in within a few days of the disaster.