Five Things to Know about Homeowner’s Insurance

1. Exclusions to coverage. For example, most insurance policies do not cover flood or earthquake damage as a standard item. These types of coverage must be purchased separately. Costs vary depending on how much insurance is purchased, what it covers, and the property’s risk.

2. Dollar limitations on claims. Even if you are covered for a risk, there may be a limit on how much the insurer will pay. For example, many policies limit the amount paid for stolen jewelry unless items are insured separately.

3. Replacement cost. If your home is destroyed you’ll receive money to replace it only to the maximum of your coverage, so be sure your insurance is sufficient. This means that if your home is insured for $250,000 and it costs $280,000 to replace it, you’ll only receive $250,000.

4. Actual cash value. The term “actual cash value” is not as easily defined. Some courts have interpreted the term to mean “fair market value,” which is the amount a buyer would pay a seller if neither were under undue time constraints. Most courts, however, have upheld the insurance industry’s traditional definition: the cost to replace with new property of like kind and quality, less depreciation. Courts have varied in their rulings as to whether or not depreciation includes obsolescence (loss of usefulness as a result of outmoded design, construction, etc.).

5. Liability. Any type of insurance policy that protects an individual or business from the risk that they may be sued and held legally liable for something such as malpractice, injury or negligence. Liability insurance policies cover both legal costs and any legal payouts for which the insured would be responsible if found legally liable. Intentional damage and contractual liabilities are typically not covered in these types of policies. There is usually an upper limit to the amount of coverage provided. Be sure that it’s sufficient if you have significant assets.

Nick Smith
Silvercreek Realty Group
Cell 208-859-6590
Fax 208-319-8969
RealOneSmith@gmail.com
www.Real1Smith.com