FAQ
Frequently Asked Questions About Property Insurance Claims
1. What does my property insurance policy cover?
1. Dwelling Coverage
What it Covers: This protects the physical structure of your home, including walls, roof, and built-in systems (like plumbing and electrical).
Understanding: Ensure your dwelling coverage is sufficient to cover the full cost of rebuilding your home in case of a total loss, not just the market value.
2. Personal Property Coverage
What it Covers: Covers personal belongings within the home, such as furniture, electronics, clothing, and other personal items.
Understanding: Check if the coverage is based on actual cash value (depreciated value) or replacement cost (full value). Make an inventory of your belongings to determine adequate coverage limits.
3. Other Structures Coverage
What it Covers: Protects structures not attached to the main dwelling, such as garages, sheds, fences, and decks.
Understanding: Ensure this coverage is set at a percentage of the dwelling coverage amount and is adequate for your additional structures.
4. Loss of Use (Additional Living Expenses)
What it Covers: Covers costs incurred if your home becomes uninhabitable due to a covered event, such as a fire or natural disaster.
Understanding: Familiarize yourself with the limits and duration of this coverage to ensure you can maintain your living standards during repairs.
5. Personal Liability Coverage
What it Covers: While primarily liability, it can include coverage for damages to others' property caused by you or family members.
Understanding: This can protect your assets in case of lawsuits. Consider increasing limits if you have significant assets.
Business Property Coverage Areas
1. Commercial Property Insurance
What it Covers: Protects physical assets of the business, including buildings, equipment, inventory, and furnishings.
Understanding: Ensure you have an accurate assessment of the value of your property, including any specialized equipment.
2. Business Personal Property Coverage
What it Covers: Covers items owned by the business, such as office furniture, computers, and inventory.
Understanding: Similar to personal property in homeowners insurance, review the coverage type (actual cash vs. replacement cost) and maintain an updated inventory list.
3. Contents Coverage:
What it Covers: Often included under business personal property, it specifically protects the contents within the business premises.
Understanding: Make sure all contents are adequately covered, especially if you have high-value items.
4. Equipment Breakdown Coverage
What it Covers: Provides protection against the repair or replacement costs of damaged equipment.
Understanding: This is essential for businesses reliant on machinery or technology, ensuring you're covered for unexpected breakdowns.
5. Business Interruption Insurance:
What it Covers: Compensates for lost income due to a covered event that disrupts operations.
Understanding: Understand how coverage amounts are calculated and ensure it reflects your business’s income needs during recovery.
Tips for Understanding Property Coverage
-Assess Replacement Costs: Regularly evaluate the cost to replace your dwelling and personal/business property to ensure coverage is adequate.
- Document Your Property: Keep an up-to-date inventory of your home or business property, including photos and receipts, to streamline claims.
- Review Exclusions: Familiarize yourself with what’s not covered in your policy, such as specific natural disasters or maintenance issues, and consider additional coverage if needed.
- Consult an Insurance Agent: Work with an agent to tailor your policy to fit your specific property needs and risks.
By focusing on these property coverage areas, homeowners and business owners can better understand and manage their insurance needs, ensuring they are adequately protected against potential losses.
2. What is a wind and hail deductible, and how does it affect my claim?
• Wind and Hail special deductible is normally a percent of the homes total value. This can range, most common 1-2%. ($300,000 value home, at 2% wind and hail deductible is $6,000)
3. What is the difference between ACV (Actual Cash Value) and RC (Replacement Cost) coverage?
• ACV is the actual cash value of your property at the time of loss, if the policy is straight ACV only you will not recover the full cost to replace your roof because the actual cash value would be less than a new roof. Replacement cost is a policy that will replace the damage at the full cost of new. Usually this is done in two checks one ACV and a second in the form of recoverable depreciation.
4. What is recoverable depreciation, and how does it apply to my insurance claim?
• Recoverable depreciation is a reserve payment insurance companies withhold until the insurance scope of work is completed. This incentives the insured to get the job done right.
5. What is a cosmetic endorsement, and why does it matter in property claims?
• Cosmetic damage is excluded in many policies sold on the insurance market today. This means if the function of the roof was not compromised by the storm the cosmetic exclusion would deny the claim. If functional damage is proven the cosmetic endorsement will not apply. This is a good example of when to consulting a Public Adjuster about your claim.