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Florida Public Adjuster: Insurance Replacement Cost Coverage to be a Big Issue This Storm Season

With Tropical Storm Colin gaining strength, Florida public adjuster Tutwiler and Associates warn property owners about the potential hazards of property insurance policy replacement cost coverage.
August 3, 2010 / TAMPA, Fla. / 

As the third named storm of the 2010 hurricane season churns toward the United States, a potentially hazardous situation for Florida home owners is already brewing throughout the Sunshine State. Florida public adjuster Tutwiler and Associates is warning home owners of a potential loophole in their property insurance coverage that could leave them open to tens of thousands of dollars of out of pocket repair costs in the event of a property loss.

The licensed and certified public adjusters with offices throughout Florida and nine other states plus the U.S. Virgin Islands say the problem is centered on the concept of replacement cost. In the event of a loss, a property insurance policy should cover the policy holder for the cost of replacing the property that was damaged. This "replacement cost," however, doesn't always live up to its name.

"Property owners need to understand a property insurance policy may say 'replacement cost,' but the finer details of the policy may reveal the policy will only replace what's there at the time of the loss," says Dick Tutwiler, founder and CEO of Tutwiler and Associates. "In order to rebuild, property owners are going to have to comply with the current building codes, which may be vastly different from the building code that was in effect when the property was built."

According to Tutwiler and Associates, replacement cost became state mandated after Hurricane Andrew ravaged South Florida in 1992. The Florida legislature said all home insurers are required to offer law and ordinance coverage in the basic amount of 25 to 50% in the policies unless the policyholder actually rejects the coverage. And while rejecting replacement cost coverage may seem like a quick fix, the Florida public adjuster says the potential short term savings aren't worth the potential risk.

"Signing that rejection form might be one of the worst things they can do," says Tutwiler. "Home owners need this extra coverage. The cost to build to the new building codes could be well above the cost to build to the old standards. If old homes don't have law and ordinance coverage, they may not be able to get a certificate of occupancy for the property, rendering the home uninhabitable."

Using a $200,000 house and 25% law and ordinance coverage as an example, the Florida public adjusters at Tutwiler and Associates say the additional amount of coverage for replacement costs would be in the amount of $50,000. In the event of a loss to an older house, that money would then be used to help the property owner bring the new building up to meet the current standards so the home owner can get a building permit and a certificate of occupancy. Until then, Tutwiler says, the house would be deemed unlivable.

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Tutwiler and Associates
Phone: (800) 321-4488
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About Tutwiler and Associates: Tutwiler and Associates is a firm of public adjusters licensed in 10 states and the U.S. Virgin Islands specializing in commercial and residential property loss adjusting. With well in excess of $113 million in client success stories over a 27-year history, the Florida public adjusters work exclusively on behalf of policyholders to help them achieve the maximum settlement amounts they can fairly and honestly recover based on their loss and their policy provisions. Professional help from the adjusters at Tutwiler and Associates can help clients obtain a fair recovery under their policy. The Gulf Coast based public adjuster firm is committed to public service and strives to educate its clients about commercial and residential windstorm and hurricane losses, flood damage, fire, smoke and water damage, collapse, hidden decay and mold losses, sinkholes, loss of stock, and business interruption.