What You Need to Check For Before Signing Your Insurance Policy

Purchasing a new property is both exciting and overwhelming; but there’s a lot that goes into moving from one place to another. Navigating around a maze of complex paperwork—like homeowner’s insurance policies can overwhelm most, if not all first-time buyers.

To make an informed decision regarding insurance and to keep yourself from being wrongfully denied, delayed or underpaid, it’s important to understand coverage options.

Here are a few important points to review before purchasing an insurance policy for your property:

1. How much coverage do you need?

Home insurance policies are designed to protect a home and its possessions within the perimeter of the property, in case of a natural calamity or occurrence of any other event that damages the property. Majority of homeowners mistakenly believe their insurance will provide coverage equivalent to the market value of the property. However, any homeowner’s insurance policy needs to cover the cost required to rebuild your home, in the event of a total loss.

Additionally, policy purchasers should factor in coverage for living expense, cost of replacement of personal possessions and liability insurance when determining the estimated rebuilding cost of the property.  

2. What is covered by your insurance policy?

According to The National Association of Insurance Commissioners, there are eight standard homeowner’s package policies in the United States, starting from the basic ‘named perils’ coverage form HO-1 to the more extensive HO-8. The levels of coverage vary from one form to another, but majority of the policies are comprehensive and cover fundamentals that include:  

· Home structure coverage: This includes repair costs for the structure of the policyholder’s home, along with detached units such as garages and sheds, but with limitations.

· Coverage for personal belongings: This includes replacement or repair costs for damages to personal belongings within the premises of home.

· Liability protection:  This covers legal expenses for accidents you or individuals mentioned in your policy can be liable for.

· Additional living expenses: This includes the costs of living away from your home, in case an insured disaster takes place and destroys your property.

3. What isn’t covered?

Understanding exclusions of the policy is just as important as knowing about your primary coverage. You might need more or less coverage depending on your location. For example, if you reside in an area prone to floods and powerful hurricanes such as Florida, you will need additional flood insurance from National Flood Insurance Program, as standard homeowner’s insurance policies do not cover damages caused by flash floods

4. How does reimbursement work?

If an incident insured by your policy takes place, insurance companies are expected to make payments for claims to policyholders. The reimbursement options may include:

· Cash value coverage:  The insurance company will provide compensation for cost of replacement, excluding a deduction for appreciation.

· Replacement cost coverage: The insurance company will reimburse replacement costs without deducting for appreciation, but only within limits of the policy.

· Guaranteed or extended coverage: The insurance company will provide a comprehensive payout that will include replacement costs beyond the limitations of coverage.

Unjust denial of claims from insurance companies is a violation of law.

If your insurance provider has wrongfully denied, delayed or underpaid your property damage insurance claim in Florida, consult an experienced legal firm to assist you with your case. Arnesen Webb, P.A. is a property insurance dispute law firm dedicated to the representation of policyholders against insurance companies. Their attorneys will guide you throughout the claims process and charge only after the successful settlement of dispute.

For details, get in touch with their representative by giving them a call at 561-757-6000 for a free consultation.