What Home Owner’s Insurance Policies Are

If you are a homeowner, your house needs to be insured for a minimum of eighty percent of its value, not counting the value of the land. You must be proactive and review your current homeowner’s coverage at least annually to make sure that your insurance is sufficient to rebuild or repair your home after a disaster. Make sure to contact us in the event of an accident or disaster. That way we can help you get the most out of your insurance coverage that you have for everything. There are also some things you should know about how your insurance coverage works.

Actual-cash-value coverage

If you have a policy that pays the actual cash value of your home’s contents, you will get a check for what your stuff was worth before it was destroyed, not what it would cost to replace it all.

Declarations pages

This annual statement from your insurance company outlines your coverage and your annual premium. Keep it with your policy.

Full replacement cost

If your property is destroyed, the insurance company is obligated to fully replace or rebuild your property without any deduction for depreciation. Obtaining full replacement cost on your personal property will cost you only about 10 to 20 percent more than the actual-cash-value coverage. Comprehensive homeowner’s coverage must include full replacement cost to repurchase all the items in your home today if they are lost, stolen, or destroyed.

Guaranteed replacement cost

Even if the damage exceeds the limits on your policy, the insurance company is obligated to fully replace or rebuild your property without any deduction for depreciation. Guaranteed replacement policies aren’t exactly what you might imagine. Insurers limit the amount that they pay out to replace or rebuild your home to usually no more than 20 percent above the amount for which your home is insured.If your home appreciates beyond the level of coverage, the policy won’t cover that amount — even though you thought you had guaranteed replacement coverage. Guaranteed replacement coverage doesn’t end with just the dwelling itself, either; you must also think about the value of the contents of your home. Liability insurance is also an option. This type of insurance helps protect you financially if someone is injured by you on your property. Rider insurance is really a separate insurance policy that goes with your homeowner’s policy to insure special types of personal property. You must obtain a rider on your homeowner’s policy, for an additional cost, to fully insure these items. A copy of your purchase receipt and an appraisal may be necessary to substantiate the value of the items covered under each rider. You may want to consider whether your home falls under special circumstances that require additional coverage. You may need additional coverage on your home if the following conditions apply. If you operate a home-based business, if you are at risk for windstorm damage or mold, or the home is prone to water damage, you may need to contact us. This way you can have the best insurance policy possible for your home.