The Florida property insurance market is changing, and one of the biggest shifts we have seen over the last several years is the new “industry standard” for water damage coverage for older homes (usually 30-40+ years old) changing to a “Limited Water” buy back provision.  Water damage claims have skyrocketed over the past several years due to Assignment of Benefit, or “AOB” fraud (a blog post for another day…) and the insurance companies have been forced to adapt their policy contract language in order to keep insurance premiums affordable for Florida homeowners. 

The “Limited Water” provision reduced policy benefits in the following *2 main ways:

1. The amount of a claim is limited to a $10,000 payout. This is a limit a policyholder with this provision will want to keep in mind as they are working with contractors after a claim to make sure they stay within their budget. 
2. The source of the water damage must be from plumbing or an appliance, such as an air conditioning unit or hot water heater.  Water causing damage to the home in any other way, such as a leaky roof, would not be covered under the “Limited Water” buy back.

The most frequent claims we see in our agency are water damage claims, so we want our policyholders to be aware of this limitation.  Here are some examples of water damage claims that frequently exceed the $10,000 limit:

1. Homes with wood or high-end flooring
2. Multi-story homes where a claim on the 2^nd floor can spread down to the 1^st floor
3. Claims that occur in the kitchen, most frequently from broken pipes under the kitchen sink, causing damage to cabinets, in addition to flooring and drywall.

Of course, any homeowner could find themselves with water damages exceeding the benefits included in the “Limited Water” buy back provision, so we encourage all policyholders to consider an alternate quote that provides for “Full Water” coverage.  “Full Water” coverage does not have a dollar amount maximum limitation, nor does it limit coverage to water damage only resulting from specific sources.  We work with several carriers who still provide this more comprehensive coverage.

We realize that every policyholder has their budget to consider, so it is our hope to provide you with options and information so you can make the best decision for your family and know what to expect in advance of a claim.

*Please refer to complete policy contract and endorsement for complete definitions, exclusions and limitations.