Consumer Services

Review Your Insurance Coverage

After a hurricane/disaster is not the time to become familiar with your insurance policy/coverage. If you have not done so already, review your insurance coverage now. A policy that was written several years ago may not reflect the value of your home today, especially if you've made additions or renovations. Some important questions and considerations are presented below.

• What does your insurance policy cover?
• What does it exclude?
• What is your deductible? You will have to pay at least this much if you have a covered loss.
• The standard homeowners' insurance policy does not cover flood damage.
• Check if your policy covers debris removal and sewer back-up.
• Find out if your policy covers additional living expenses to reimburse you for the cost of living in a temporary residence if you are unable to live in your home.
• If you have jewelry or collectibles, check the limits of coverage. You may want to buy more coverage for these items.
• Do you understand the difference between replacement cost and actual cash value?

If your coverage is for replacement cost value and the cost to repair property is greater than the cost to replace the property, the insurance company will reimburse you the dollar amount needed to replace damaged personal property or dwelling property with the like kind and quality, limited by the maximum dollar amount listed on the declarations page of the policy. For example, if you own a five-year-old lawn mower that is destroyed by a fire, the company will reimburse you with an amount to purchase a new, similar lawn mower, minus your deductible.

If your coverage is for actual cash value and the cost to repair the property is greater than the actual cash value of the property the insurance company will reimburse you the dollar amount to replace the property minus the amount of accumulated depreciation. For example, if that same five-year-old mower was destroyed, and the average lawn mower lasts 10 years, the company will only reimburse you for the half (10 years minus five years) of the cost of the item, minus your deductible.

Remember, now is the time to read your policies closely and be sure you fully understand the coverage.