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Home Insurance Frequently Asked Questions

Q: What does Loss of Use cover?

A: If damage to your home is covered by your insurance policy, Loss of Use pays for additional costs that you have due to not being able to live in your home while it is being repaired. It will pay for a hotel or an apartment, eating out expenses, laundry expenses, etc.

Q: If your home burns down and you decide not to rebuild, how much money do you get?

A: You get the face value of the policy. This is called the “Valued Policy” law. The insurance company must pay the face amount of the policy without depreciation or contesting the value if the fire was not deemed arson or insurance fraud.

Q: Is flood covered on your homeowner’s policy?

A: No. What is considered flood? Flood is outside ground water coming in. It has to affect two properties so one of your neighbors would have to also have been flooded.

Q: What is Actual Cash Value?

A: It is replacement cost minus depreciation.

Q: If your home is hit by a tornado, and you have to rebuild, how much money do you have to rebuild with?

A: You have the face amount of the policy plus the added percentage that you added to the policy, up to what it actually costs to rebuild with like kind materials. Each company has a different name for it. Most of the endorsements add 25%, some add 50%. If it costs less than the total with the extra percentage, you only get what it actually costs. You do not receive an additional check for the difference.

Q: Does liability on a homeowner’s policy cover anything other than someone getting hurt on your property?

A: Yes. If so, give me some examples. A dog biting someone is covered even if off the property. If you are playing golf and a golf ball hits someone in the head, you are covered. If you rent a 4 wheeler while on vacation and injure someone, you can file a claim on your homeowner’s insurance. If you rent a facility for your daughter’s wedding and a guest is injured, your homeowner’s could pay.

Note- If you are a school teacher and are sued by a student in your classroom for injuries, you must have the business pursuit endorsement on your homeowner’s policy or your policy will not defend you or pay out on a claim.

Q: What do you have to do to collect money from the insurance company after a claim for personal property?

A: You have to show receipts that you replaced the property to get the replacement cost amount. In other words…. you will get the first check for actual cash value. Once you replace the property and send in receipts, you will receive a second check for the difference between the actual cash value and replacement cost.

Q: How much money will you get to replace your stuff with?

A: You will get what it actually costs to replace it up to the limit for personal property in the policy. So if you are insured for $100,000 and it only costs $50,000 to replace your stuff, you only get $50,000.

Q: Is a tractor used for maintaining your property covered on a homeowner policy’s personal property coverage?

A: Yes, as long as it never leaves the property.

Q: Which coverage on your homeowner’s policy covers a fence or a pool?

A: Other structures

Q: If your home or rent house is vacant for 30 or 60 days, (depending on the carrier), which coverage do you lose most of the time?

A: Vandalism and Malicious Mischief

Q: Under a preferred carrier’s regular homeowner’s policy that uses special form, how do you tell a client what perils are covered?

A: You tell them everything is covered unless it is excluded on the actual policy. You can then offer to give them the portion of the policy with that carrier that shows the exclusions.

Q: If someone gets hurt on your property and just wants their doctor bills covered and doesn’t want to sue you, which coverage would pay their bills up to the limit on the policy?

A: Medical

Q: What is, “Backup of Sewer and Drains,” coverage?

A: It covers damage to your dwelling and furnishings due to water backing up through sewers or drains or comes in from a sump pump, sump pump well, etc. Example- If a toilet continues to run causing water to overflow; it is covered under the homeowner’s policy without this endorsement. But, if the toilet overflow occurs because of a clogged sewer 40 feet away, it would not be covered under the regular homeowner’s policy without the endorsement.

Auto Insurance Frequently Asked Questions

Q: What coverage is mandatory in Arkansas?

A: Liability coverage is required by law. Liability coverage pays for any claims when you are at fault in an accident. The minimum liability you are required to carry by law is $25,000 per person for bodily injury, $50,000 per accident and $25,000 to cover property damage to other's property. Almost all insurers offer higher limits. When you apply for liability coverage, we will offer you an opportunity to purchase coverage for uninsured motorist bodily and property damage, underinsured motorist coverage for bodily injury and personal injury protection coverage.

Uninsured motorist coverages cover you and your automobile if the other driver is at fault and does not have liability insurance.

Underinsured motorist coverage gives you additional protection if the other driver is at fault and doesn't have enough coverage to cover your injuries.

Personal Injury Protection provides you with wage loss, death benefits and medical coverage regardless of fault.

Q: What other coverages are available?

A: You may also purchase comprehensive and collision coverages, rental reimbursement, roadside assistance or towing & labor. GAP coverage (loan payoff) is available with some carriers. Comprehensive coverage protects against damage to your automobile from acts of nature or other events not associated with operating the automobile. Collision coverage protects against damage to your automobile when it is involved in an accident. Rental reimbursement pays for a rental car up to the limit if your vehicle is not in working order due to a covered loss. Roadside assistance varies with each carrier. Some of our carrier's roadside assistance program covers towing costs, delivery of fluids, including fuel, oil, or water, service to the battery, changing or inflating tires and lockout service to recover keys inside your vehicle. There are lots of different endorsements available. Some of which are the following: Coverage for trip interruption, pet injury, coverage for “essential services” customers are unable to perform during their recovery from a covered auto accident. This includes housekeeping, food preparation, transportation services, and lawn mowing. Accidental air bag deployment can be extended even when the vehicle has not had a comprehensive or collision loss. You can upgrade to a single loss deductible when a loss affects more than one policy. You can purchase accident forgiveness and guaranteed renewal.

Q: Are there any discounts offered?

A: Yes, some of our carriers offer a college graduate discount. Some offer a defensive driver discount for those insureds that are 55 years old and over who have successfully completed a course approved by the Office of Driver Services. Some of our carriers offer discounts for certain occupations, longevity at your job, owning a home, or being accident free. Nearly all of our carriers offer a discount as much as 20% for also having your home insured with the same company. We offer discounts for good grades, driver's training, etc.

Q: Why have my rates gone up when I haven't had an accident and/or claim?

A: Probably because the insurer increased its overall rates because it has paid out more losses than expected. You may personally receive a lower or higher rate based upon various factors. The good thing about doing business with an independent agency, such as ours, is that when you do have an increase, we will requote your insurance with all of our carriers to make sure that the company that we have you with is the best one for you. Even though we shopped your insurance with all of our companies to begin with when we first wrote your insurance, their rating systems could have changed, they could have decreased their rates in our area or could be offering new discounts. So, we might need to move you to a different carrier in order to keep your rates as low as possible.

Q: Why haven't my physical damages premiums decreased as my vehicle ages?

A: The price of repairing a vehicle does not go down as a vehicle ages.

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Childress Insurance Agency
2391 W Main St. Suite A Cabot, AR 72023
Phone: (501) 941-1148