home insurance frequently asked questions
Q:Can my homeowners insurance be canceled because my house is empty?
A:Yes. Most insurance companies allow a 30 day grace period from the time a home becomes vacant or unoccupied. Unoccupied homes are not covered under a standard home insurance policy because they are often left in disrepair or become vandalized. For more specific information regarding your personal insurance policy, please contact your insurance agent.
A: When a new policy is written or an old policy renewed, the insurance carrier will want to make sure the risk is insurable. The underwriters are most concerned with the current condition of the home, especially the roof, and whether or not there are any liability hazards on the property. Normally if the home is not up to underwriting standards the homeowner is given a time frame to correct the situation before a policy is cancelled.
A: We get this question a lot. Hurricane is never the peril that you are insuring for. A peril is simply the event that caused the damage. During a hurricane the most common perils will be wind and flood. Damage that is caused by flooding, storm surge, or flash floods due to heavy rain will be covered under a flood insurance policy. A standard home insurance will exclude the peril of flood but will cover wind and hail as long as these are not listed in the exclusions. Homes in a high hazard area for tropical storms will likely see a separate deductible for “Wind/Hail” or “Named Storm” on their policy. This deductible will apply when damage occurs during a tropical weather system.
A: Your insurance agent or carrier should run a replacement cost estimate to determine the amount that it would cost to completely rebuild your home including debris removal after damage occurs. Insurance will never cover the value of the land the home sits on because the land cannot be replaced. Insurance covers the cost to replace the home after a total loss, but you still own the land.
Q: What is an admitted carrier?
A: Admitted carriers are governed by the state to sell their products, while non-admitted carriers aren’t. With a non-admitted carrier, the state simply does not financially back the carrier. An admitted carrier must get authorization from the State to increase rates, while non-admitted carriers do not need approval.
Q: Should I keep an inventory of my household contents?
A: Absolutely! If your house burns down and half of your belongings are reduced to ash, how else are you going to prove what needs to be replaced? The best way to keep an inventory is by video or photo. Simply take 3-4 pictures of each room along with closeups of specific branded items. For your kitchen and storage areas, we recommend taking video or images with all cabinets closed, and with all cabinets open. This way you catch recordings of everything within the cabinets as well. Keep a copy of these in a safe place away from the home or in a cloud storage.
Q: What is the difference between Replacement Cost and Actual Cash Value?
A: RCV (Replacement Cost Value) is the cost to rebuild or repair the home with the same or like same materials as it currently stands, minus your deductible.
ACV (Actual Cash Value) is the RCV minus depreciation and deductible. If you have a 25 year roof and it is 10 years old at the time of damage, your insurance policy would cover the cost to replace the roof minus 10 years of depreciation and deductible.
Q: What is a “NAMED STORM DEDUCTIBLE”?
A: A “Named Storm Deductible” would apply when damaged is caused by a hurricane, tropical storm, or tropical depression. This deductible is usually a percentage of the dwelling coverage, with most companies offering the standard of 2%-5%. Let’s do the math, if your home is covered for $300,000, then your 5% Named Storm deductible is $15,000. That’s the portion you would be responsible for. Make sure you are comfortable with this figure.
Q: What type of rating does this carrier have?
A: AM Best is a national company that rates insurance companies based on their financial strength and risk exposure. This rates their ability to pay claims. If a company cannot get rated by AM Best, there is a reason for it. http://www.ambest.com.