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.
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