Homeowners Insurance FAQ

1. What’s the difference between the “actual cash value” and the “replacement cost?
The terms “actual cash value” and “replacement cost” describe the payment of covered losses through your homeowner’s insurance policy. If you policy uses an actual cash value determination, you’re entitled to the depreciated value of damaged property. If your policy uses the replacement cost determination, you’ll receive the actual cost to replace damaged property at current prices.

2. Is my personal property covered if it’s not at my home during the time of loss? 
Your homeowner’s insurance policy Coverage C, or the “named perils” coverage, describes personal property coverage anywhere in the world. For instance, if you make a household purchase abroad and ship it home, your policy will cover your purchase in transit even if the property has never been in your home.

3. What is a public adjuster? 
Your insurance company provides an adjuster to you at no charge. You may also be contacted by adjusters with no relationship to your insurance provider, or a public adjuster. Public adjusters may help you settle a claim for as much as 15 percent of the total settlement value. This fee is not covered by your insurance policy. Your state’s insurance department may set a percentage that public adjusters can charge. If you use a public adjuster, check their qualifications by calling your state insurance department. Always avoid individuals who solicit door-to-door after a major disaster.

4. Does my homeowner’s policy protect against earthquake damage? 
Earthquake damages are not covered under standard homeowner’s insurance. If you are at risk, add an earthquake endorsement to your policy that covers damages caused by earthquake, landslide, volcano or other land movements.

5. What’s the difference between all risk and named perils policies? 
All risk and named perils policies cover different causes of loss. A named perils policy covers your losses resulting in the perils listed in your policy, typically including ire, hail, windstorm or other physical losses. While an all risk policy offers broader protection covering losses resulting from any peril except those specifically excluded in your policy.

6. If I’m sued, who covers legal defense expenses? 
Your homeowners policy doesn’t cover legal defense expenses, but may provide legal counsel.

7. How do I find out if an accident is covered under my homeowner’s insurance policy? 
Policy owners have responsibilities to adhere to before receiving compensation for a loss. If you feel a claim should be filed, notify the insurance company or agent as soon as possible after discovery. Follow the steps to file a claim as advised by your insurance company.

8. What are policies regarding mobile homes?
Mobile home policies can be covered under a replacement cost, actual cash value or stated amount. A stated amount policy covers an agreed upon amount at policy issue regardless of depreciation value. If you choose a stated amount policy, review and update terms annually to ensure replacement of your mobile home is a realistic amount.

9. What is an extended or guaranteed replacement cost policy? 
If your home is destroyed beyond repair, your insurance policy typically covers the value of rebuilding your home. An extended or guaranteed replacement cost policy protects within a certain percentage above in the event building expenses have risen unexpectedly.

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