Hail, Wind and Flood: How much is an hour of your time before the storm worth?

How much is an hour of your time worth? Would you think it could be worth thousands of dollars? Millions of homeowners policies are issued alongside the mountain of paperwork associated with new mortgages, and it’s easy for most first-time home buyers to overlook their insurance policies until it’s too late. Only after a catastrophic event, such as a hail storm or a flood, are people forced to pay attention to the conditions of their insurance policy. You should take an hour to review your entire policy annually and discuss any concerns you may have with your agent. Pay special attention to its exclusions section and its declarations page. The Policy Statements page is a quick snapshot of the most important policy details, which are simplified for better understanding below.

What exclusions are listed on your policy? The exclusions section of your insurance policy lists the situations that the insurance company will not pay for in the event of a loss. This section is discreetly placed on your policy pages and is not on your declarations page, but this section is one of the most important. All basic homeowner policies exclude events such as earthquakes, sewage accumulation, nuclear explosions, wars, mudslides, and sinkholes, just to name a few. Your policy will not cover flooding. Flood coverage can be purchased through your agent, but is not part of your homeowners policy. It is underwritten through the National Flood Insurance Program, governed by FEMA. You can live outside the floodplain, but the fact is, if you live within five miles of ANY water source, then you need flood insurance. The good news is that the further you are from the floodplain, the cheaper the insurance will be. There are also supplemental exclusions that are not covered except with the appropriate endorsements.

Endorsements are additions to your homeowners policy that can be added to your basic policy in a similar way to luxury options on a new car. And like the new ones because they will add to the final price, but have a relatively small impact on the monthly payment. These additions are things that most people assume are already covered in their policy. These include, but are not limited to, sewer backup, broken windows / glass, downed trees, wind-driven rain, and building code required upgrades. Be sure to read all the exclusions and endorsements in your policy carefully.

How much is your deductible for wind and hail damage? Your deductible is the portion of a claim amount that you must contribute toward your repairs. That amount is then deducted from the total payment you receive from your insurance company. A higher deductible generally means a lower premium, but many companies have consistently increased deductibles rather than dramatically increasing premiums. On most policies these days, you will have two types of deductible. A deductible will be for general perils and generally amounts to $ 500- $ 1000. You will notice that there is a separate wind / hail deductible. This deductible is where some insurance companies have decided to recoup some expenses in higher-than-normal risk states, such as Florida, Louisiana, Texas, and Oklahoma. You may think you have a $ 500 deductible when 2-inch hail crashes against your window, but you may not have realized that your insurance company increased your deductible by 1% to 5% of the limits. of your policy.

Your policy limits are the maximum amount your insurance company will pay in the event of a total loss, such as a tornado or fire. Policy limits are set by you or your mortgage company when the policy is first purchased, but after renewal, most companies will use your current county assessment amount. You should make sure your policy limits are set to your home’s value plus at least 15%. If your home is worth $ 100,000, then your policy limit must be at least $ 115,000 for your home. It generally costs 15-20% more to replace than to build a new one. What are the limits of your policy?

Do you have an RCV or ACV policy? The difference between these two policies can amount to several thousand dollars out of pocket. Replacement Cost Value (RCV) is the value of replacing your damaged items at current market rates. The insurance company will then depreciate these items based on their age and compare them based on their useful life expectancy. For example, a roof tile that is warranted for thirty years and is ten years old will have a depreciation rate of 10/30. The amount of depreciation formulated is subtracted from the RCV to reach the actual cash value (ACV). If you have an RCV policy, the depreciation withheld by the insurance company will be issued to you after the replacement of your damaged items is completed. If you have an ACV policy, the depreciation held by the insurance company is not recoverable and this amount will not be issued to you. The benefit of an ACV policy is a lower monthly premium payment, which makes it attractive for rental properties and non-habitable structures like barns. You should discuss the pros and cons of each type of policy with your agent to determine which one is best for your situation.

These are very basic insurance concepts. For more detailed answers on policies and complaints, you can visit http://www.hailandwind.com/ and post a question on the forum. You can also get more detailed information on your state’s Department of Insurance website, and you can call your insurance agent if you need to make any changes. He or she will be happy to take your call. It only takes about an hour to read your insurance policy, and you should read it every time you renew. Make sure you know what is excluded and supported. Find out if you can pay your deductible in the event of a claim. Match your policy limits to the value of your property, plus 15-20%, and determine which policy you need, ACV or RCV. An hour of your time could save you thousands!

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