Homeowner’s Insurance Guide
Spending hundreds of dollars month after month on Auto, Homeowner’s, Health, and Life Insurance is frustrating to many consumers. To make matters worse, consumers do not really understand what they are paying for. It is not until tragedy happens that people appreciate this safety net. Auto Insurance is straightforward. It is the type of insurance people use most frequently and have the most knowledge about. Life and Health Insurance are, more often than not, provided through a person’s place of employment and not much choice is available without going outside the group plan. Property Insurance (Homeowner’s, Landlord, Condo and Renter’s) is the second most purchased type of insurance, behind Auto, and most consumers …show more content…
“Dwelling,” “Other Structures,” “Personal Property,” “Additional Living Expense,” “Family Liability Protection,” and “Guest Medical” are the major categories of coverage. All coverages and deductibles are built around the “Dwelling” coverage amount. Most of the other coverages and the deductibles are a percentage of the “Dwelling” coverage. A home with a Dwelling coverage of $100,000 could have a “Personal Property” coverage of $60,000 (60%) and an “All Other Peril” Deductible of $1,000 (1%.) It is important that a homeowner understands what is covered, how it is covered, what it is covered from, and for how much. The maximum dollar amount each one is covered for is listed on the Declarations …show more content…
The manner in which a policy pays a claim must be weighed heavily. “Actual Cash Value” (ACV) policies verses “Replacement Cost” (RC) Policies could mean the difference of thousands of dollars in a loss. ACV depreciates the value of an item. RC takes into consideration the cost to replace the item with an item of similar quality at today’s price. Imagine a vehicle ran a stop sign and crashed into a kitchen. The cabinets, cookware, refrigerator, and dishes were destroyed. The insurance adjuster determined the replacement cost for the home repairs and items damaged equaled $25,000. The homeowner had a deductible of $2,000. With a Replacement Cost policy, the insurance company would pay out $23,000. With an ACV policy, the $25,000 damage would be factored by the age of the items. The average payout is about 50%. Taking into account the $2,000 deductible, the homeowner would receive a payout of $10,500. Each HO policy form has a standard payout method. ACV or RC. This can be changed on any policy form by Endorsement. An Endorsement is an additional form adding or removing coverage from the standard policy.
• HO-A “Basic” is an ACV policy for Dwelling and Personal Property. RC can be added by Endorsement.
• HO-A+ “Broad” is a RC policy for Dwelling. Personal Property can be ACV or RC depending on the insurance carrier. RC can be added by endorsement if not included.
• HO-B is a RC policy for Dwelling and an ACV for Personal
Spending hundreds of dollars month after month on Auto, Homeowner’s, Health, and Life Insurance is frustrating to many consumers. To make matters worse, consumers do not really understand what they are paying for. It is not until tragedy happens that people appreciate this safety net. Auto Insurance is straightforward. It is the type of insurance people use most frequently and have the most knowledge about. Life and Health Insurance are, more often than not, provided through a person’s place of employment and not much choice is available without going outside the group plan. Property Insurance (Homeowner’s, Landlord, Condo and Renter’s) is the second most purchased type of insurance, behind Auto, and most consumers …show more content…
“Dwelling,” “Other Structures,” “Personal Property,” “Additional Living Expense,” “Family Liability Protection,” and “Guest Medical” are the major categories of coverage. All coverages and deductibles are built around the “Dwelling” coverage amount. Most of the other coverages and the deductibles are a percentage of the “Dwelling” coverage. A home with a Dwelling coverage of $100,000 could have a “Personal Property” coverage of $60,000 (60%) and an “All Other Peril” Deductible of $1,000 (1%.) It is important that a homeowner understands what is covered, how it is covered, what it is covered from, and for how much. The maximum dollar amount each one is covered for is listed on the Declarations …show more content…
The manner in which a policy pays a claim must be weighed heavily. “Actual Cash Value” (ACV) policies verses “Replacement Cost” (RC) Policies could mean the difference of thousands of dollars in a loss. ACV depreciates the value of an item. RC takes into consideration the cost to replace the item with an item of similar quality at today’s price. Imagine a vehicle ran a stop sign and crashed into a kitchen. The cabinets, cookware, refrigerator, and dishes were destroyed. The insurance adjuster determined the replacement cost for the home repairs and items damaged equaled $25,000. The homeowner had a deductible of $2,000. With a Replacement Cost policy, the insurance company would pay out $23,000. With an ACV policy, the $25,000 damage would be factored by the age of the items. The average payout is about 50%. Taking into account the $2,000 deductible, the homeowner would receive a payout of $10,500. Each HO policy form has a standard payout method. ACV or RC. This can be changed on any policy form by Endorsement. An Endorsement is an additional form adding or removing coverage from the standard policy.
• HO-A “Basic” is an ACV policy for Dwelling and Personal Property. RC can be added by Endorsement.
• HO-A+ “Broad” is a RC policy for Dwelling. Personal Property can be ACV or RC depending on the insurance carrier. RC can be added by endorsement if not included.
• HO-B is a RC policy for Dwelling and an ACV for Personal