What’s In This Articles

• Choosing Insurance Coverage for Your Home
• Do You Have to Have Home Insurance?
• Actual Cash Value
• Replacement Cost Value
• Modified replacement cost value
• Extended cost value
• Guaranteed cost value
• Additional Living Expenses
• What Isn’t Covered by My Homeowners’ Insurance?
• Do You Live in a Flood Prone Area?
• How Are Insurance Rates Calculated?
• How Can I Reduce My Homeowners’ Insurance Premium?
• If You Need a Public Adjuster for a Property Damage Insurance Claim, Call AllCity Adjusting

Choosing Insurance Coverage for Your Home

If a fire, hurricane or severe storm damages your home and its contents, a home insurance policy provides coverage to repair or replace your home and its contents. Therefore, choosing insurance coverage for your home is one of the most important steps you will take.

Typically, a standard homeowners’ insurance policy covers your home and outbuildings. That is called dwelling coverage. In addition, homeowners’ insurance covers the cost to repair or replace heating and cooling systems and their components. This includes a furnace or water heater if a covered event damages them.

Homeowner’s insurance also covers if a storm damages in-home personal property. In this instance, it is helpful for the homeowner to have a home inventory list when they file a claim. A home inventory list details the cost and date of purchase of appliances, furniture, curtains, etc.

The homeowners’ insurance company will reimburse the homeowner for the damaged personal property.

Likewise, if a thief steals your property, or a vandal defaces property, home insurance kicks in.

Lastly, if someone is injured on your property, and they sue, homeowners’ insurance gives you liability insurance though your homeowners’ policy.

Do You Have to Have Home Insurance?

Most likely, yes. Mortgage companies will not give you a mortgage unless you have home insurance. In fact, they often list the mortgage company in the policy. Indeed, they typically pay the insurance premiums themselves and add that cost to your monthly mortgage payment.

You legally don’t need homeowner’s insurance if you paid cash for your home or have paid off your mortgage. However, if a fire or hurricane seriously damages your home, the cost to rebuild your house may be in the tens of thousands of dollars. Therefore, it’s still a good idea to avoid getting into financial trouble if something happens to your home or possessions.

How Do You Get Homeowners’ Insurance?Insurance company websites can help you get started when shopping for homeowners’ insurance. Of course, most describe what is and isn’t covered and the options are available.

However, it’s not always easy to find specific information on the various coverages. Consequently, you should use an independent insurance agent. He or she can help find the policy right for your needs.

What Types of Insurance Coverage Should I Get?There are several types of insurance coverage you should consider.

Actual Cash Value

Actual cash value (ACV) covers the cost of replacing your home or your belongings. However, the insurance company will only reimburse you the cash value of your damaged refrigerator on the date of the covered event.

As a result, you may have bought the refrigerator for $1,000 four years ago. But that refrigerator will have depreciated. Indeed, it may only be worth $600 today.
And that is how much the insurance company will pay you after you file a claim.

Replacement Cost Value

Replacement cost value (RCV) covers the cost of rebuilding your dwelling as it stands today, regardless of depreciation.

Of course, having RCV coverage is more expensive than ACV. But it may be worth it.

Modified replacement cost value

Modified replacement cost value covers older homes. They do not use depreciation in calculating reimbursement. But original features like stained glass, ornate plasterwork, or millwork will be replaced with modern materials. In other words, they do not restore the home to its original condition.

Extended cost value

Extended cost value provides a set percentage of coverage beyond your policy limit, usually 20% to 25%, according to the Insurance Information Institute.

Guaranteed cost value

Guaranteed cost value doesn’t place any dollar limits on replacement costs. However, upgrading your dwelling to meet the current building codes may not be covered.

Additional Living Expenses

Additional living expenses (ALE) coverage is standard in homeowners’ insurance policies. This coverage would reimburse you for the rent, hotel room, restaurant meals, and other incidental costs you incur while waiting for your home to become habitable again.

If your clothes reek of smoke and can’t be cleaned, they will reimburse you for new clothes you had to purchase through this coverage.

Therefore, make sure you keep all your receipts.

Indeed, you can even get a check upfront from the insurance company adjuster to cover these expenses.

What Isn’t Covered by My Homeowners’ Insurance?

Homeowner’s insurance covers most scenarios where a loss occurs that is “sudden and accidental.”

Therefore, losses from windstorms, hurricanes and fires are typically covered up to the coverage limits.

However, losses which occur due to lack of maintenance by the homeowner are not covered.

For instance, if a house loses power in a winter storm, pipes could freeze and burst. Insurance would cover the damages from that “peril”.

Conversely, if there was a leaking pipe for weeks or months in a second-floor bathroom which damaged the ceiling and walls beneath it, the carrier might deny coverage for any damage caused by the leak.

Homeowners’ insurance companies require their insureds to maintain their property. Leaky roofs have to be fixed and old pipes have to be replaced.

Lastly, coverage for some events are typically excluded from policies, such as natural disasters or other “acts of God,” and acts of war.

Do You Live in a Flood Prone Area?

What if you live in a flood or hurricane area? Or an area with a history of earthquakes? You’ll want riders for these events.

Standard homeowners’ insurance policies do not cover water damages from floods. Rather, people who live in flood-prone areas must purchase flood insurance through the National Flood Insurance Program (NFIP). The Federal Emergency Management Administration (FEMA) runs the NFIP.

Therefore, if you live in a flood-prone area, apply for FEMA flood insurance so that they can reimburse you for covered flood damage. Whether a flood, or simply heavy rain, caused water damage to a home can be a mystery to homeowners. A good public adjuster can help a homeowner answer that question.

How Are Insurance Rates Calculated?

To determine risk, home insurance companies consider past home insurance claims submitted by the homeowner.

Additionally, they look at claims filed by prior homeowners of the same property.

They also look at the area-were there claims filed by other homeowners?

Is it a high-crime area?

Lastly, they look at the homeowners’ credit rating.

How Can I Reduce My Homeowners’ Insurance Premium?

Security systems can reduce rates. A burglar alarm monitored by a central station or tied directly to a local police station will help lower the homeowner’s annual premiums.
Additionally, using smoke alarms and CO2 detectors can also help.

If you raise your deductible, your premium will be lower. But you may have to pay for additional repairs because of the higher deductible.

Typically, insurance companies give a discount of 10% or more to customers who maintain other insurance contracts under the same roof, such as auto insurance.

In fact, you may also get a discount on your car insurance bill.

Homeowners who don’t have a mortgage will most likely see their premiums drop. Underwriters believe if you own your home free and clear, you’ll take better care of it.

Loyalty often counts. The longer you stay with some insurers, the lower your premium can become, or the lower your deductible will be.

If You Need a Public Adjuster for a Property Damage Insurance Claim, Call AllCity Adjusting

We are a family-owned claims company with five decades of combined adjusting experience. As a result, if there’s one thing we understand, it’s that you need 100% of your claim value.

At AllCity Adjusting we work to ensure you get 100% of your property damage insurance claim value. Equally important, with over 50 years of combined experience as insurance adjusters, we know insurance companies and understand where they cut corners.

Therefore, if you have filed a claim but only received a low-ball offer from the insurance company, or they are taking too long to process your claim, or you just want to talk to someone on your side, call us at 844.692.3587. Or you can email us at info@allcityadhjusting.com.