HOMEOWNER'S INSURANCE FAQs
What is Actual Cash value vs. Replacement cost coverage on a home?
Replacement Cost is the cost to replace an item or structure to its pre-loss condition. Actual Cash Value is replacement cost less depreciation. Assume you had a TV that was 5 years old, and it was damaged in a fire. Under Replacement Cost, the insurance company would give you enough money to buy a NEW television similar to the one you lost. Under Actual Cash Value, they would give you the money your old, used TV was worth, and it probably wouldn't be enough to buy a new one.
My neighbor's tree fell on my house or fence, whose insurance pays?
If the cause was weather related or an act of god, your insurance will have to pay for the damage. In some circumstances, if there is evidence that the tree in question was dead and your neighbor neglected to have it cut down then their insurance company will pay for the damages.
My friend has a special endorsement on her wedding ring. Do I need similar coverage? Isn't my ring covered under my personal property on my home insurance?
Insurance companies put limitations on certain items specifically if they are lost or stolen. One of the most common being jewelry, your agent should be able to discuss the limits and coverage your policy provides. If the value of your piece of jewelry is more than what your policy covers, it will be your decision to ad the scheduled jewelry endorsement to provide the adequate coverage for that piece.
My kids recently went away to college, do they need renters insurance?
If your kids are renting an apartment or living on campus, although your policy may cover their belongings, it is always advisable to buy renters' insurance as it may cover more than their belonging, it also has liability, medical coverage, etc. Do not assume ask you agent for advise.
I bought a new house, but I haven't sold my old home, I can just leave the current insurance on the old home until it sells' without making any changes?
Depending on the policy and the insurance carrier, coverage may be extended to the old home until sold, or you might be required to buy vacant property coverage, as the home will be considered vacant. If you decide to lease the vacated home, than you will need to buy a different type of policy, your agent is the best source of advice on what is adequate and required for your protection.
My insurance agent wants to insure my home for more or less than what I paid for it. Why?
Insurance companies insure homes based on replacement cost, not market value. Market values can drastically go up and down, vary from city to city and can depend on the size of the lot of land that the home is built on. For these reasons insurance companies estimate how much it will cost to rebuild your home in the event of a total loss, regardless of market conditions.