These are a few of the Frequently Asked Questions that we receive regarding Homeowners Insurance:
- DOES A HOMEOWNERS POLICY INCLUDE FLOOD INSURANCE? Homeowners policies usually do not provide coverage for flood damage. However, if your community participates in the National Flood Insurance Program, you may be able to purchase flood insurance from a local insurance company. The cost varies based on a number of factors. What happens if you decide not to buy this type of insurance and your home is flooded? You'll only receive federal disaster assistance if the flood is declared a disaster by the U.S. president. The assistance is typically a loan which must be paid back with interest. If you buy flood insurance from an insurance company, claims are paid even if a disaster is not declared by the U.S. president. Better yet, there's no payback requirement.
- I HAVE A POLICY WITH "REPLACEMENT COST". DOES THAT MEAN MY INSURANCE WILL PAY TO REBUILD MY HOME? Typically, replacement cost means your insurance will pay the cost (up to policy limits) of rebuilding or repairing your home without a deduction for depreciation. However, it may not take into consideration price increases for labor and supplies. A policy with extended replacement costs, like Allstate's Your Choice Home with Coverage Cushion, may provide better protection by paying a percentage over the limit to rebuild your home. For example, if you purchased insurance with an extended replacement cost of 20% on a $200,000 policy, you could get up to an extra $40,000 in coverage to pay for the additional expenses of replacing your home.
- IF I FILE A CLAIM, DO I HAVE TO WORK WITH THE INSURANCE COMPANY'S CONTRACTORS? The process for selection of a repair company may vary by insurance company. With Allstate, you can choose the repair firm, and an Allstate claim representative will work with them to agree to the cost. Or, you can choose a contractor participating in the Allstate vendor referral program, and a workmanship guarantee will be issued on behalf of the vendor for up to three years from the date the repairs are completed.
A friend who has worked for many years in our Claims Department often says: "A Homeowners Insurance Policy can take a left-turn on you in a hurry." We've found the better a customer understands the policy, the less often they'll be confused when a bit of bad luck turns up and a claim has to be filed.
I love to read a great post like this one. Thanks for making it RAIN!!!
From recent experience, I will always recomend getting flood insurance. When it's likely not needed (ie not in a flood zone) it can be very inexpensive and incase it does by chance flood, like it did recently here in landlocked Atlanta, you'll not have to go through what everyone is going through right now with coming out of pocket for the thousands in damages.
Shannon, thanks for the article.
Thanks for sharing. I like your point at the end of the post.....the better a customer understands the policy, the less often they'll be confused when a bit of bad luck turns up....that is so true in just about any transaction/contract/policy.
Shannon,
This is helpful info. Thanks for shedding the light on some homeowner's insurance questions.
Jeana Cowie, Broker Associate, Re/Max Real Estate Ltd., Bergen County, NJ
This is great info - I can use it to build some materials for my clients and customers. Thanks! Laurie
Great post. Most people don't understand the difference between flood insurance and home owners insurance here is some other home owners insurance information
An important issue to consider particularly in these difficult economic times is homeowners insurance and to beware of scams especially where people are affected by severe weather conditions.
Royal Palm Insurance , Gainseville , FL , Tower Hill Insurance Company , Gainseville , FL, and Newman Insurance Agency , Inc., Hollywood , FL and were involved with arranging and providing homeowners insurance and shortly after being paid for the insurance they would inform the customer the home is at risk cancel the policy. Then they offer the customer another policy with another of their companies and charge a significant additional amount.
During hurricane season, they cancel again informing the customer again the home is at risk.
It is possible this may involve discrimination.