Fire Insurance for Homes and Dwellings
TEST YOUR KNOWLEDGE
How much do you know and understand about *Homeowners Insurance? At the end of this page there will be a quiz for the “Homeowner’s 101 crew” If you pass the test I will send you a **Starbucks Gift Card provided we get or already write your home insurance. So existing Clients, do not fret… a letter is going out to you via the U.S. Postal service soon. Also, be sure to sign up for the email News letter… I do not believe in spam…so do not worry. You may get one or two emails per year regarding the news.
If you want to stay up on agency news you can always visit our site here 24/7. Thank you.
Homeowners’ Coverages
Coverage A – The primary Dwelling / House “Owner Occupied”
Coverage B – Outbuildings / Structures (fencing, detached garages)
Coverage C – Personal “unscheduled” property
Coverage D – Loss of use
Coverage E – Medical
Coverage F – Liability CPL (comprehensive “personal” liability)
Homeower’s Policy Forms
H03 – Special form (one of the best policy forms available)
H5A – Special form also.. varies slightly form H03
H08 – Low value Homeowners… usually offers “ACV” on dwelling and may have more exclusions that other forms
Dwelling Fire Coverages
Coverage A – The Primay dwelling “generally tenant” Occupied
Coverage B – Outbuilding / Structures
Coverage C – Owners Personal property (not tenants)
Coverage D – Loss of rents
Coverage E – Medical
Coverage F – OL&T (owner, landlord & tenants liability)
Dwelling Fire Policy Forms
DP3 / DF3 – Dwelling fire policy – the is the best form to use for tenant rental properties
DP1 / Df1 – Dwelling fire policy – may or may not exclude VMM and only provide for “ACV” (actual cash value”) claims settlement
Replacement Cost Disclosure
ACV – Actual Cash Disclosure – This policy endorsement provides for (“market value…less depreciation”) Not desirable in our opinion
Replacement Cost – This endorsement pays to the policy limit if required with no depreciation in order to repair or replace.
Extended Replacement Cost – This endorsement pays “beyond, if necessary” to repair or replace
Co-Insurance Clause – Part of your contract that acts as a penalty clause if you under insure.
Here is an example. To replace a home the current cost-a-mator (software calculations provided by a third part) determines it would cost $500,000 to replace this home.
The Client / Agent somehow agree to insure the home for $250,000 (50%) of the replacement cost. The co-insurance clause triggers because the home is insured at “below 80%” of the replacement cost at the time of claim. Here is what happens…
Replacement Cost $500,000, Insured for $250,000 at time of loss, triggers co-insurance clause. Claim amount of damages in this hypothetical scenario are $200,000. Here is the formula for settlement. Loss $200,000 x 50% = $100,000 less the deductible.
Conclusion: Under insuring in the case triggered the penalty clause. ON A $200,000 CLAIM THE INSURED WILL ONLY GET $200,000 LESS THE DEDUCTIBLE. IF THE ENDORSEMENT ON THIS HOME IS “ACV” THE SETTLEMENT WILL BE EVEN LESS BECAUSE OF DEPRECIATION.
Moral to the story… do not shop on price alone!
“Make the Wise Choice and have Peace of Mind”
Does your home insurance policy contain one of these? The answer is yes! D0 you know what it is? If the answer is yes then you are an exception to the average consumer that purchases home insurance.
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* The information presented in these examples are in “general terms” and are not meant as legal advice. Also note, coverage lettering and policy endorsements will vary from Company to Company and from State to State. The best way to fully understand your home insurance is to do a review and ask questions of our agent. We hope you enjoyed our little test.
** Here are the rules! You must reside in one of the States that we are licensed in and a. either have home or dwelling fire insurance with us or b. allow us to quote your home or dwelling fire and c. complete the quote process and quiz. You have to pass the quiz. Good luck.
Limit 1 per household