How Much Should I Insure My Home For?

Brandon and Tampa Insurance Advice

How Much Should I Insure My Home For?

homeowners insurance

Here is a question I hear from my customers a lot: “I can’t sell my house for that much, so why do I have to insure it for that much?” With the downturn in property values, many people find themselves insuring properties for more than they are worth–and they want to know why.

Properly Insuring Investment Properties

Another issue that comes up, especially among my property investor clients, is that they pick up a home for only $50,000 and invest another $20,000 in it, but don’t like it when I insure the property for $200,000. They ask: “I only have $70,000 in the property, why do I have to insure it for $200,000?”

When this happens, I have to remind my clients that they are purchasing a replacement cost policy and the cost of replacing a home has little to do with the property’s market value or how little you paid for the property.

Replacement cost coverage defined is: “the amount of money it would take to repair, replace or rebuild your home with materials similar to the kind and quality used in constructing your home.”

80% Rule for Insuring HomesThe 80% rule is another important part of the replacement cost concept. The 80% rule simply means that your structure must be insured to at least 80% of its replacement cost in order for you to be fully covered. If your home is not insured to 80% of the replacement cost, your insurance company is not obligated to cover the entire cost to rebuild your home, or even pay the full amount on partial loss claims. In the event that a homeowner purchases insurance that is less than the minimum 80%, the insurance company will only reimburse the homeowner a proportionate amount of the required minimum coverage that should have been purchased.

Guaranteed replacement cost coverage example

Here’s an example of guaranteed replacement cost coverage: let’s say an investor/homeowner purchased a home that suffered a complete fire loss.   Let’s also say the day before the total loss the property had a market value of $200,000 (down from $300,000 before the market downturn). The homeowner decides to rebuild the structure from the ground up and discovers that the cost to do so will be $300,000. Unfortunately, the property owner only insured the home for $200,000 (less than 80% of the replacement cost), so now he/she is out of pocket for the additional $100,000 to build the new home. Had the owner carried at least $240,000 in coverage (80% of $300,000), his/her insurance company would have paid the entire $300,000 replacement cost.

The same principle applies to partial losses. Let’s say the loss was only for $32,000. Using the formula above, the insurance company would only cover $21,333 (the loss amount multiplied by the coverage level divided by the replacement cost, which in this case is $32,000 * ($200,000/$300,000). At first glance, you might assume that since the amount of coverage is greater than the cost of the damage ($200,000 vs. $32,00), the insurance company should reimburse the entire amount. However, because of the 80% rule, this is not necessarily the case.

I also like to ask my investors when they don’t want to insure their investment properties for the full estimated replacement cost: “I understand you only have $70,000 invested in this property, but if it burned to the ground and it cost $200,000 to rebuild, will you be happy when the insurance company only gives you a fraction of that? Or, if you had a $50,000 partial loss and the insurance company only gives you $17,500, will you be satisfied?” $50,000 * ($70,000/$200,000).

That is why we at L&M Insurance Group insure properties for the full estimated replacement cost value.

So now you may ask, how do you determine the replacement cost value of my property? That’s a great question and I will discuss it in my next blog.

Homeowners Insurance Discount for Alarm System

Homeowners Insurance Discount for Alarm System

Brandon, Tampa, and Riverview Florida Homeowners Insurance Tips

Alarm Systems that keep you safe and lower your bill

alarm monitoring discount on homeowners insurance Brandon Florida

Can I get a discount on my homeowners insurance for having a burglar and fire alarm system in my home?

Yes, but the alarm system must be monitored. That means when an intruder enters, or the system determines there is a fire, it triggers not just an audible alarm, but sends a signal to the alarm company’s central monitoring facility, where the police or fire department are notified.   I have seen discounts as low as $30-$40 and as high as $80-$100 annually. To get the discount, contact the monitoring company and have them e-mail, fax or mail a copy of the certificate to our agency. Click on the “contact us” link if you have additional questions on this discount.

Florida SR-22 Auto Insurance

Florida SR-22 Auto Insurance

SR-22 Auto Insurance Coverage for Tampa, Brandon, Riverview and More

L & M Insurance Group, in Riverview, Florida, specializes in SR-22 policies, both owner and non-owner. We offer the lowest rates and better, faster service than most other agencies in East Hillsborough County.

There are many reasons Florida may require you to file an SR-22. The most common reasons include:

  • Driving without a license
  • Too many points on your driving record
  • Causing an accident when you are uninsured/underinsured
  • Driving with a suspended license
  • Child support
  • Judgment
  • Driving without insurance
  • Drunk driving violations

A Florida SR-22 can be a non-owner or an owner SR-22, and is a certificate filed with the DMV by your insurance company which states you comply with the Florida financial responsibility law, and allows you to get your license reinstated after a suspension.   It is required to be kept in force for a specific period of time, usually three to five years.

In addition to providing low cost insurance rates, and superior attention to your specific needs, we have the resources and expertise to handle your unique situation.

Florida SR-22 Independent Insurance Agents

Best of all–we are an independent insurance agency–an insurance broker. This means we compare rates of multiple companies to get you the best price. We work for you!  Call right now to talk to an agent 813-672-4100.

Contact us today for a free quote.




Auto Insurance Coverage Explained

Auto Insurance Coverage Explained

Tampa and Brandon Car Insurance Experts Explain Auto Insurance Coverage

Auto Insurance

Purchasing car insurance can be a daunting task. There are multiple coverage options and state requirements to consider, and if you have a leinholder or are leasing your vehicle, you have to comply with their demands as well. At L&M Insurance Group, we will take the time to educate you so you can make an informed choice before your purchase. Below you will see the major coverages to consider when shopping for car insurance. Take the time to read through the different options and don’t hesitate to call or use the email link on our site to ask additional questions or request a quote.


These coverages are the most commonly purchased types of car insurance, and make up the core of most policies. Bodily injury covers expenses related to medical costs, sickness, pain and suffering, lost wages and death for the injured third party. Basically, it pays on your behalf if you cause a crash and injure someone else, and, surprisingly, it’s not required to register your car for most Florida drivers–although it is a recommended coverage. Property damage covers damage to a third party’s property in an at-fault accident and is a required coverage for all Florida car owners.


This is perhaps the most misunderstood coverage for Florida policyholders. Most people think uninsured motorist coverage will pay for damages to their car when they are involved in an accident with an at-fault driver who is uninsured. This is not true. Uninsured Motorist covers your medical bills, lost wages, pain and suffering after your $10,000 PIP coverage is used up. Even then, it only pays after the other driver has been declared at fault in the accident and it has been determined they are uninsured or underinsured. You can purchase “stacked” uninsured motorist coverage, which costs more, to increase the amount of coverage on your policy.


PIP, or “no fault” coverage is mandatory in Florida and provides $10,000 coverage for your medical costs, disability benefits and death benefits. It’s called “no fault” because it does not matter who is at fault in an accident: everyone is supposed to have their own PIP coverage to cover their own injuries. PIP is a required coverage for all Florida car owners.


Med Pay provides coverage for certain medical and funeral expenses for all those occupying a covered vehicle involved in an accident, regardless of who is at fault.


Comprehensive provides coverage in the event of a loss or damage to an insured vehicle caused by incidents other than a collision. This includes damages due to fire, theft, vandalism, windstorm or contact with an animal.


Collision provides coverage in the event of a loss or damage to an insured vehicle caused by a collision.


Rental Reimbursement provides coverage for rental car costs to temporarily replace an insured vehicle due to a covered loss.

Roadside Assistance coverage provides payment for an authorized service representative to provide (1) towing of a covered disabled vehicle to the nearest qualified repair facility and (2) labor on a covered disabled vehicle at the place of disablement when necessary due to a covered emergency.

L & M Insurance Group is an independent insurance agency. That means we can compare your car insurance costs with multiple companies. We currently compare your auto rates with more than 15 different carriers–that is the most competitive way to shop your policy. Click on the “contact us” link and ask for a quote today–or call us at 813-672-4100!

What Is Non-Standard Insurance?

businesswoman holding car in the hands - insurance or car business conceptIf you’re looking for a new auto insurance policy, you may have come across the term “non-standard insurance.” What does this mean? Non-standard insurance is simply a category of auto insurance especially for people who are considered higher risk by insurance companies. And this group of people is growing all the time. Some reasons you might need a non-standard auto insurance policy include:

  • You have multiple violations on your driving record.
  • You have serious violations, such as driving while intoxicated (DWI) or driving under the influence (DUI), driving with a suspended license, reckless driving, or a major (more than 16 miles over the speed limit) ticket.
  • You must carry an SR-22.
  • You have recently had a serious auto accident.
  • You have bad credit or a lack of credit history.
  • You drive a specialized or expensive vehicle, such as a high-powered sports car or custom-built car.
  • You’ve never been insured or you have had a lapse in your coverage.
  • You are a teenager or a senior citizen.
  • You have had your license suspended or revoked.

“Non-standard” does not mean “sub-standard”—the term has nothing to do with the financial health of the insurance company or the coverages it offers. Non-standard companies must follow all state laws and regulations. They offer the same types of coverage that standard ones do, but to a broader range of potential customers. Some insurance companies specialize in non-standard insurance, while others offer both standard and non-standard policies.

Non-standard insurance usually offers higher risk drivers better coverage at a lower price than a state-assigned risk pool, the other option open to drivers who do not qualify for standard insurance policies.

You don’t have to fall into one of the above-listed categories to purchase a non-standard policy. Generally, non-standard policies cost more than standard ones (because of the perceived higher risk factors), but occasionally they will offer a more competitive rate than a standard policy. It’s a good idea to check with your independent insurance agent who will be able to help you find the option that is best for you.

L & M Insurance Group, Inc., offers auto insurance policies and carriers with rates in all tiers including preferred, standard, non-standard, and specialty. We offer the lowest rates, best payment options and exceptional service of any agency in east Hillsborough County.

Larry Johnson