Covered Causes of Loss
Covered causes of loss will vary by policy form. Some policies specifically name the covered cause of loss. If the cause of loss is not specifically listed in the policy as covered, the damage would be excluded. These are often referred to a named cause of loss policy form.
Other policy forms take an opposite approach and state that all causes of loss are covered unless specifically excluded in the policy. This type of policy is often referred to as an open cause of loss form. This type of policy is more comprehensive than a named cause of loss policy.
Examples of causes of loss would include fire, lightning, windstorm, hail, theft, vandalism, malicious mischief, etc.
Please note that flood is NOT covered under most property policies.
Insurance to Value
Most policies are written on a replacement value basis. These policies include a replacement cost provision which requires the home to be insured for its replacement value at the time of the loss. This amount is not the current market value or current tax appraisal value, but rather the cost to replace/rebuild new at the time of the loss. Failure to insure for the required amount could result in a penalty in the settlement of a partial or total loss.
There are optional endorsements that may be available to you including but not limited to:
- Replacement Cost on Dwelling and Contents
- Extended Replacement Cost
- Inflation Guard
- Guaranteed Replacement Cost
- Ordinance and Law Coverage
Statistics show that 59% of homes are underinsured by an average of 22% so review your policy limits carefully.
Occupancy
The home policy requires the home to be occupied by the named insured for residential purposes. Any other occupancy, occupant or vacancy could alter and sometimes void the policy coverages. Please let us know of any occupancy issues or changes.
Deductibles
The policy lists applicable deductibles. Some insurance companies have applied a special windstorm, hail and/or named storm deductible. Be sure you are comfortable with your deductible. Lower deductibles are not always cost effective. Higher deductibles can result in a lower premium.
Liability (Lawsuit) Limits
You may wish to consider increasing your limits or obtain an excess/umbrella policy for increased liability limits.
Optional Coverages
Most policies have sub-limits, cause of loss limitations, exclusions and conditions within the policy on certain types of properties, liability exposures and other exposures. Insurance companies offer optional endorsements that increase policy limits or add coverage that is otherwise excluded in the policy form, thus tailoring the policy to meet your individual needs.
