These series of posts are based on the questions consumers most frequently ask, explains what is covered in a standard homeowners policy and what is not. Where gaps in coverage exist, it tells you how to fill them.
To simplify explanations, we assume that you have a policy known as Homeowners-3 (HO-3), the most common homeowner’s policy in the United States. Find out what type of homeowners policy you have. If you have a different policy, you should review your options in question #17.
Question # 17: What should I do if my policy provides less coverage than the HO-3?
Answer: Review your coverage with your agent. Some older policies provide less coverage than the HO-3. They may not provide coverage for water damage, theft, or liability. They may also provide coverage for the house on an actual cash value basis, rather than a replacement cost basis.
Actual Cash Value means replacement cost less depreciation. For example, if your roof is destroyed in a storm, the insurance will only pay for the cost of a new roof less the amount of depreciation of the old roof. If your roof was in great shape, this deduction will not be large. However, if the roof was old and worn out, the deduction for depreciation may be significant. You should try to get an HO-3.
A current concern if you have enough protection for your home – call us.
EMERGE INSURANCE AGENCY