Insurance: Tips to lower insurance bills

REPLACEMENT VALUE: You should be insuring your house for its replacement value, which is the amount it will take to rebuild the home if it is destroyed by a covered peril.

Some insurers pay only the replacement value stated in your insurance contract, while others will provide a cushion of up to 25 percent. The replacement estimate may not take into account a surge in demand after a storm that could increase the cost of supplies and labor.

WINDSTORM COVERAGE: Florida Statute 627.712 allows homeowners to exclude coverage for wind events in some cases. Most mortgage holders, however, require wind coverage. The savings from a policy by dropping windstorm coverage could be substantial, up to half of the total premiums paid or more. Use caution before dropping the coverage, because it comes with a high risk. It’s not just hurricanes that it covers, but any wind scenario.

CONTENTS COVERAGE: Check on options to reduce coverage for furnishings and other contents. Insurers used to give consumers coverage pegged at a certain value of their structure — 50 percent was common — even if their furnishings and belongings were minimal. Ask about 25 percent, for example, and see if it meets your needs .

RAISING DEDUCTIBLES: An option that could offer substantial premium savings is raising your deductible. Your mortgage company might be able to veto such a move. Most insurers offer hurricane deductibles of $500, 2 percent, 5 percent and 10 percent.

Florida Statute 627.701 allows insurers to offer deductibles beyond the 10 percent, but not all insurers offer larger deductible options. To have a deductible in excess of 10 percent, when the home is valued at less than $500,000, the policyholder must provide to the insurer a letter saying what amount in deductible they are willing to pay. Permission must also be obtained by the mortgage company if applicable.