If you own a home, you have homeowner's insurance. While many homeowners accept that fact and sign on the dotted line, many fail to revisit their policies throughout the years to make sure they are receiving the best coverage available. This is typically due to the fact that insurance is just not something people want to delve into, it can be time-consuming and complicated to understand.
However, understanding what is and isn’t covered in your homeowner’s insurance policy can make a huge difference if you are faced with damage. Knowing the details of your insurance policy gives you more control of your coverage, and that knowledge is a powerful tool when it comes to protecting your property and belongings.
Homeowners insurance policies typically cover damage resulting from wind, fire, hail, water damage (excluding flooding), as well as other causes of loss such as by theft. Many of these policies include some sort of cost coverage for having to stay elsewhere while your home is being rebuilt or repaired.
There will also be coverage for any legal liability for any members of your family, pets, or other people hurt while on your property. This usually refers to your property rather than inside your dwelling and is limited in the amount that it will payout.
When you insure your home, you are insuring two things, the structure itself and your belongings. Each policy will have its own structure of coverage that allows for the replacement costs, extended replacement costs, and actual cash value of the insured property.
Insurance that pays the policyholder the cost of replacing the damaged property without deducting depreciation is typically limited to a maximum dollar amount. Whereas if you have a policy that covers extended replacement costs, it may cover costs up to a certain percentage over that limit, giving you protection against such things like increased construction costs.
If the policy covers the cost to replace your home less the depreciation costs for use and age, then it is considered to be actual cash value coverage. Under these terms, your damaged property is subject to the cost of replacing it in today’s marketplace, which can be much higher than its actual cash value.
It is a good idea to look over your existing homeowners insurance policy annually, refreshing your understanding of its terms and giving you an opportunity to decide to seek comparison policy offers. It is always good to consult with an insurance agent to help you understand your policy.
The Nolen Agency is happy to provide consultation of your existing homeowners policy, as well as provide you with options that can give you personalized coverage that can better serve your needs. Taking an active role in your coverage options will give you peace of mind knowing that you are well covered in the event of damage or destruction to your home and property.