Insurance of any kind is meant to bring a sense of security to policy holders. Research proves that most people trust their insurance agents and carriers because they believe that they have the consumer’s best interests at heart. It’s easy to forget that insurance is business – and a HUGE one at that – and insurance companies make money when they do not pay claims.
Homeowners often have a false sense of security when it comes to their home, believing that their homeowner’s insurance policy will cover everything in case of a loss from a disaster. The reality is that insurance policies vary greatly in cost and benefits, so it’s vital to become very familiar with your policy.
As a local roofing contractor, we cannot emphasize strongly enough the importance of understanding your homeowner’s insurance policy, down to the most minuscule details. Doing so will leave you prepared to take the correct actions if you ever are hit with a disaster, so you can focus on recovery instead of trying to figure out where to start.
Areas of Homeowner’s Insurance Coverage
Generally speaking, homeowner’s insurance policies come in packages. These packages will contain some or all of each of the following areas – areas you should be well aware of before signing up:
- Dwelling: For damage to the home and any attached structures, plus any fixtures, wiring or related systems.
- Additional structures: Non-attached structures like sheds, fences, solo garages, guest homes or others on your property are covered here.
- Personal property: Covers the value of personal possessions, from electronics and appliances to smaller items like clothes.
- Personal liability: Your financial loss if you’re sued and found liable for damages to someone else on your property.
- Medical payments: Will cover medical bills for people hurt on your property.
- Loss of use: Covers additional living expenses, if needed, while the home is being repaired after damage.
It’s important to also understand that each of the above areas comes with limits. Your coverage will carry the full replacement cost of the home or area included, but this is not the same as market value for the property – you should check regularly to ensure your coverage doesn’t drop below the full replacement value.
From here, consider limits on each individual area. In most cases, coverage in areas like additional structures (generally 10 percent), personal property (50 percent) or loss of use (20 percent) will be expressed as a percentage of the total coverage amount, while you will have your choice of the coverage limits for the overall dwelling, personal liability and medical payments.
Understanding Deductibles, Declarations and Exclusions
Let’s go over three other terms that are very important for homeowner’s insurance:
- Deductible: The deductible is the amount of money you pay out-of-pocket before the policy kicks in and covers the rest. A higher deductible generally comes with lower premiums, and vice versa.
- Declarations page: This is the section of a policy that specifies your basic information – name, address, policy length, policy limits, and perhaps others. You should always have a copy of your homeowner’s insurance declarations page in your home.
- Exclusions: Exclusions refer to provisions that eliminate coverage for certain risk areas – essentially, exclusions limit the scope of your coverage in certain areas, so it’s vital you understand them.
For help with storm damage or any other area of roof repair, speak to the staff at The Roof Doctor today.