Wind/Hail Coverage

Don't Get Blown Away!

We have all seen the devastation to the communities hit by recent tornadoes.  We are certainly not strangers to these storms here in Texas.
But what  is a homeowner's recourse after a devastating storm? This is where your insurance should protect you. This is why you have been paying those premiums! So that you can rebuild/repair that home that has been lost or damaged.
  On your homeowner's policy you should have a coverage for "Wind/Hail" listed. This will cover damage done to your home by Hail, Wind, Tornadoes and Hurricanes. (But not Flood- this is a separate policy altogether) Wind/Hail is listed as a deducible amount, not a coverage amount. In most cases, your wind/hail coverage should be the same amount as your "Dwelling Coverage". You will pay a set deductible before that coverage kicks in. The deductible is usually a percentage. For example, 1% of a $200,000 dwelling value would be $2,000. So  you would pay the first $2,000 of the repair/rebuild amount and your insurance would (should) cover they remaining amount. This coverage will just cover the actual building (or home). It doesn't cover Personal Property (contents). Fortunately most policies will cover Personal property as well. 
   One thing you want to make sure of is that you have a Replacement Cost policy, both for your dwelling AND your personal property. (They are 2 different types coverage and have separate rules governing them.) Some companies will try to sell you on a lower price without telling you it is an Actual Cash Value (ACV) policy. A Replacement Cost policy will pay out the amount to "replace" your home and it's contents at today's value. An ACV policy will pay out what it cost minus depreciation for the time and wear on your home and it's contents. It is your choice. But do yourself a favor. Spend a little more money and get a great deal more coverage with a RC policy. 
  Your agent is there to make sure you have the coverage you need and want. Ask him or her questions. You pay a premium to make sure you, your family, your home and your possessions are taken care of. Make your agent earn his/her keep by explaining what coverage you have, what your limits are.  Insurance is there to make you whole again in the case of a loss. After a devastating storm like the recent tornadoes, you need to know your insurance will do what you bought it for- Protect you!

Can we help you? call The Brockman Agency toll free 1-877-987-8683


    

Market value vs. Replacement cost

The High Cost of Rebuilding

   If I bought my home for $300,000, then why do I need to insure it for $350,000? This is a very common question. It is a question I couldn't answer before I got into the insurance industry. 
   The Market Value of your home is what it costs to buy your home. That would be the $300,000 in the above example. The Replacement Cost used to determine your insurance amount is what it costs to literally rebuild your home. That would be the $350,000.  The basic issue that drives the difference between these two, is that the price of building materials and services continue to rise, while the value of real estate continues to decline.
   Many factors will affect the price of rebuilding your home. 
*The price of building materials is one. Did you know that there is a tiny bug, the mountain pine beetle, that has chewed its way through 40 million acres of timber west of the Mississippi? This has caused a lumber shortage in many areas of our county. 
*Another factor is that often, specialized workers are needed to prevent further damage in the case of a partial rebuild. 
*Building codes may been updated since your home was built. That will cost more on a rebuild. 
*There is the debris removal after a claim as well.
*Labor costs will be higher because it is more efficient to hire several crews to work on several homes (as in when building an entire neighborhood) than it is to hire one crew to work on one home. 
  If you upgrade or renovate your home, be sure to let you your insurance agent know. This can affect your replacement cost, especially if you put in hardwood floors or update the kitchen or bathrooms. Many clients don't want to make that call because increasing the replacement cost will increase your insurance premium. But it is negligible in comparison to the out of pocket costs you will forfeit when you rebuild your home without enough coverage in place. 
   You should update the replacement cost on your home every 3-5 years. What it costs to replace your home today is not what it will cost to replace your home in 5 years. The cost of rebuild fluctuates as the cost of materials and services change.

Some insurance carriers offer Actual Cash Value policies. This covers what it would cost to replace your home minus the depreciation on your home. These policies will be cheaper, but  they will not pay out the entirety of rebuilding your home. You will be out the extra money, or will have to decide to make cut backs in the rebuild.

We always suggest replacement cost. It is a little bit more money in the short term. And we all think “it will never happen to me”, but it can happen to you. And when it does, you want the right amount of coverage to protect your home.

 Thanks for Reading!
Nancy Brockman   

As always, if you have questions or concerns about your Home, Auto or Commercial insurance, please call toll free 877-987-8683 or click:  http://www.wekeepuinsured.com/