Are You Covered?
There are some things you should know about your homeowners policy and how your deductible and exclusions may affect your coverage . Insurance is an ever-changing industry and an Agent you can count on is critical to understanding your coverage. You also need to know the right questions to ask your agent so that he/she can help you understand what type of coverage you are paying for.
This is one of the most misunderstood aspects of a homeowners policy and in today’s insurance climate it is more confusing than ever. I will try to outline the differences and how they affect your insurance value. Most homeowners policies carry a $1000.00 deductible and that basically means you as the insured are responsible for the first $1000.00 of damage to your property even if you have coverage. (example: estimate for damages is $4000.00 you will receive a check to cover those damages for $3000.00 …. $4000.00 – out-of-pocket deductible $1000.00 = $3000.00.) We are also beginning to see more and more deductibles being sold as percentages. This type of deductible is based on the insured value of your home. (example: you buy a policy that insures your home for $200,000.00 and it has a 2% deductible = $4000.00 deductible. The same $4000.00 claim as above now pays out zero dollars). One of the other common types of deductibles is a duel deductible. This often is a base $1000.00 deductible for all covered perils but carries a $2500.00 deductible for “storm damage” or “water damage”. If you have a good agent he/she will be able to give you many options on the type of deductible that suits your needs.
Exclusions come in many forms and can be a major surprise to a policy holder if the agent has not done a good job of explaining the way they work. Exclusions can be complicated and some policies are now packed full of them. This is where you really need your agent to take some time and walk you through your coverage. An exclusion is a portion of the policy the excludes a certain type of damage or peril. For instance, I got a call from a home owner a few weeks ago telling me that she had a leak and her entire kitchen was soaked! We started the emergency demo and I asked her to call in a claim and get me a copy of her policy. We sent pictures to her carrier and the next day she called me and explained that the claim was denied over the phone due to a 14 day water damage exclusion buried in her policy. I began to read the policy and sure enough it had an exclusion that stated that any water damage over 14 days old was not covered. Luckily she was well with in the 14 day period and after over 3 weeks of constant emails and tons of pictures we were able to get the loss covered. If she had waited it might not have gone her way. I can not stress enough to talk with your agent about specific exclusions on your homeowners policy!
Peace of Mind
We all buy homeowners insurance for some peace of mind and protection for our most valuable asset. Always refer to your agent for coverage questions and get it in writing. Ask to see the specific policy language or lack there of. Remember if it isn’t in writing it didn’t happen! That’s how your insurance carrier sees it and that is how you should see it as well. If you do have property damage make sure you hire a contractor with a background in handling insurance claims to ensure a smooth process. We are always happy to put you in touch with some of the best agents in the industry such as GMM Insurance Group in Lexington SC.