Homeowner’s Insurance: Do you Know What Your Policy Covers?

Jul 24, 2013

Most people never read their insurance policy.

• Do you even know what is covered or not covered on your policy?

If you do not understand your insurance policy and what is covered it could cause major difficulties if you need to file a claim. If there is a claim to file, you need to know what your policy covers and the details of coverage.

• Have you read through more than your Declarations Page?

If you have read through it and you do not understand your coverage then you need to ask your homeowner’s insurance agent in New Orleans to explain it in laymen terms. Not understanding your policy could cause you denials and much stress if you feel you have a valid claim.

• Do you have replacement or cash value coverage?

Ask your homeowner’s insurance agent if you do not know which coverage you have. It is immensely important if you would intend to rebuild your home in a case of total loss.

• Do you know the difference between replacement and cash value?

There is a huge difference in these two types of coverage, as well as a premium difference most of the time. It is a very important item in your homeowner insurance that you need to understand.

Cash Value- This coverage will pay you actual cash value of your property and personal belongings at current fair market value, less depreciation usually. This means that in order to replace your property you will have to make up the difference.

Replacement Value- This coverage pays replacement cost, without you paying out of pocket difference. Some policies will not cover all contents at replacement value, but you want to make sure that your dwelling is replacement value.

If you have a catastrophic incident and your home is a total loss, it would be completely devastating to find out that you could not rebuild it without paying for the difference of market value and replacement cost. Read your policy, talk to your homeowner’s insurance agent in New Orleans to make sure you have the most optimum coverage for your homeowner’s insurance policy.

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