With the recent devastation in Oklahoma caused by tornadoes, it’s time to revisit if your insurance covers everything that’s needed in the event of this type of natural disaster. The homeowner and auto insurance policy obviously respond to damage caused by windstorm. Tornadoes and Hurricanes fall into that category. On the home insurance side, the following coverage will apply for all of those folks who had an insurance policy: Rebuild of the structure up to the limit of insurance. Some policies have an extra percentage, usually 20% or higher, available for purchase as an endorsement. For example if you had $200,000 coverage for the dwelling, multiply the percentage and add it back to the $200,000. One of our companies starts at 25%. At a cost of $10 per year, it’s definitely worth it to get an extra $50,000 available to rebuild, for a total of $250,000. We also have a company that will rebuild the home with no limit for like kind and quality. Personal Property coverage applies up to the limit shown. It’s usually 50% or 70% of the dwelling limit. So, on our $200,000 home, the Personal Property limit will be $100,000, or if Replacement Cost on Contents is purchased, the limit is $140,000. As a consumer, Replacement Cost on Contents should be purchased with your policy. It’s an optional endorsement. This means your 10-year old TV will be replaced with a brand new one. Your 4-year old dress will be replaced with a new one. If this endorsement is not purchased, the settlement is Actual Cash Value (Replacement Cost minus Depreciation). The cost for this endorsement varies by company. This limit of coverage does not increase, although we do have a company that will increase the coverage based upon the extra cost explained above. Additional Living Expense coverage will apply if the home cannot be lived in while the repairs are being completed. Even though you may not be able to live in your home, you still have to pay the mortgage. This coverage will pay the additional costs over and above what your normal expenses are on a monthly basis. Some companies limit this coverage to a percentage of the dwelling coverage, and will place a time limit of one year on the rebuild of the home. Other companies don’t have a limit on this coverage.
Posted on: Mon, 10 Jun 2013 20:58:00 +0000
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