When it comes to the laws that govern home insurance, there can be a lot of difference between states. If you are feuding with your insurance company over a Florida property, understanding Florida law is paramount.
As such, Florida is one of the states that has a valued policy law. According to the State of Florida, the valued policy law mandates that an insurance pay the full policy limits rather than the actual cash value of the home if the courts declare the property to be a total loss.
What is the “actual cash value?”
The cash value of a property is how much money an individual would need to pay in order to completely replace the property as per the date something destroyed the property.
The problem is that different property experts may value a certain property differently depending on a variety of factors. The Florida valued policy law intends to avoid any protracted litigation on this point by mandating insurers pay full policy limits as opposed to actual cash value.
What is a “total loss?”
Typically, Florida homeowners fill the total loss requirement in one of two ways. The first is to prove that the home is so destroyed that it can no longer legally function as a dwelling. The second is to have local officials issue a demolition order for the dwelling.
Depending on your specific situation this may be difficult or easy to prove. Keep in mind that the value policy statute does apply to natural disasters like hurricanes, fires and tornadoes but typically does not cover flood damage.