Homeowners Insurance

Insuring your home for the total cost of rebuilding in case of fire or other calamity is the most advisable path. This policy should be annually updated and reviewed each renewal period. Without sufficient insurance, you may find yourself short when it does come time to rebuild. Your insurance company may only cover the value set at time of policy issuance.

Your policy should also be reviewed if you do improvements, major renovations or additions to the home.

Discuss with your agent the different kinds of policies that may be available to you.

One type is the "replacement cost" policy. It pays the homeowner the cost of replacing the damaged property without exceptions for depreciation but this policy normally has a maximum amount.

There is also the "guaranteed replacement cost". This type is the same as the first but without a set dollar amount. However, some policies may still limit total payout to 120% of the cost of rebuilding.

A third policy is the "actual cash value" policy. This type covers replacement of the damaged property but withholds a "depreciation" amount.

Not all of these policies may be available in your area and a complete discussion with your insurance agent is vital to your economic health.

You may also want to consider flood insurance. You should investigate as to whether your home is located in a flood plain or if the area has ever been know to experience high waters. Flooding WILL NOT be covered ina a standard homeowner's insurance policy. Flood insurance is issued through FEMA, a Federal government program. Talk to your agent. He can advise you of the proper policy for your situation.

If in a home purchase, you as a buyer, take over the unused portion of the previous owner's hazard insurance policy, be sure it is an updated policy and will cover your rebuilding costs.

Thanks for visiting my web site. Please do not consider this information as total and complete. Use a qualified professional insurance agent to make your decisions.

Rick Lockwood, Realtor®
(512) 635-2691  Email