Why You Should Read the Fine Print of Your Homeowners Insurance Policy
Insurance policies can be hard enough to understand without all the additional insurance lingo and fine print that are included with your policy. As your agent, we understand that it can be difficult to know when coverage
will be provided since every policy is different from the next. This is why we have listed some important reasons as to why you should read the fine print of your insurance policy so that you know the questions to ask to better
protect yourself from denied claims.
Q: What will happen if I lose my home in a fire? Am I insured for market value or replacement cost? What is the difference?
A: Most insurance policies are insuring your home at its replacement cost. Which, in most cases, means that coverage will be greater than its current market value. Replacement Cost is the estimated amount that it would
cost to repair or rebuild your home, whereas Market Value is the value of your home in its current condition in the current marketplace, i.e. what it would sell for.
Q: What may not be covered by my homeowners policy? Might I need a supplemental rider or a different policy altogether?
A: A standard homeowners policy does not provide coverage for losses caused by Earthquakes and Floods. If there are certain losses that you are wary of, you should contact your agent to see if your policy includes any of these exclusions. Additional coverage's that may need review are coverage for tools, jewelry and firearms since specialty items usually have limited coverage. Additional coverage can often be purchased for these items.
Q: If I file a claim, will I be required to use the insurance company’s recommended contractor or will I be able to choose my own contractor to repair any damages?
A: You are able to choose your own contractor to repair any damages but there are benefits to choosing the one recommended by the carrier. If you choose your own contractor, you should make
sure they are fully licensed and insured.
Q: Is there anything I need to watch out for that might cause a claim to be denied? Maintenance requirements, time-frame to report damage, vacancy clauses etc.?
A: Your policy may have certain clauses or exclusions that cease coverage in certain circumstances. Some of these may include loss of coverage when a home is vacant for more than 30 days or if a loss is caused to the home by the freezing of a pipe when heat has not been maintained in the home.