Before the need arises to file a claim you should review your current insurance policy to make sure it covers your needs. Below is a quick list of insurance coverage’s shown on the Declaration Page and what it means in plain English. We recommend that you review your policy each year with your agent and depending on where you live, consider getting Flood Insurance to cover items that your normal policy doesn’t.
Section Coverage A; Dwelling – This is the most an insurance company has to pay if your house is totally destroyed or damaged — Quick tip; this amount should be increased yearly as the costs to rebuild go up / check out an inflation guard endorsement & never let the amount drop below 80% of a houses value
Section Coverage B; Other Structures – This is the most they will pay to repair or replace a damaged standalone garage, shed, fence, etc… — Quick tip; certain structures especially on a farm or used for business will probably need to be on a separate policy or listed as a separate line item. As a reminder, even though you may have had a barn built for 6 thousand a few years ago – it will cost more now.
Section Coverage C; Personal Property – This applies to your clothes, TV’s, computers, etc… located in your house. — Quick tip; check your insurance companies maximum amount paid for specific items like jewelry, guns, work tools, etc… to make sure that you have adequate coverage – if necessary they have endorsement riders to increase the amounts as required
Section Coverage D; Additional Living Expenses – In case your house is deemed unlivable or the repairs require you to temporarily live elsewhere, this is the maximum the insurance company will pay
Replacement Cost Endorsement – For the minimal amount this costs, you can’t afford not to have this. Imagine your entire 15 year old shingle roof needs to be replaced (i.e. $5000), would you rather pay just your deductible (i.e. $500), or your deductible and the depreciated amount taken off the settlement aka ACV or Actual Cash Value(i.e. $500 + $2500)?
For more information on this topic you might want to read this brochure from NAIC.
