Insurance Help & Information

Insurance can be very complicated, especially when you are in the process of buying a new home and have so many other things on your mind.  Most of us don’t deal with the details of our homeowners insurance policy very often, and we are glad it is that way.  But, there are some things that you can do to protect yourself from getting an unexpected hit to your budget.

Like any industry, when you are dealing with insurance quotes, you will find some agencies that are there both to help you and to help themselves.  When that line becomes blurry is when agents are doing their best to “close the deal” and get you the lowest quote possible in an effort to “make the sale”.  The problem is that although nobody is doing anything purposefully wrong, if the quote doesn’t utilize accurate information, then an additional premium could be billed to the insured at a later date.  Nobody wants to end up having a bill that they didn’t expect.  Here are some ways to avoid that:

RCE:  What is it?  Replacement Cost Estimator.  The replacement cost estimator is a tool used within the insurance industry to generate a dollar amount that it will cost to rebuild your home in the event of a total loss.  Much of your quoted premium will be based on the outcome of the RCE.  Many people try to reduce the RCE because in today’s current economy, the RCE value is likely higher (and maybe significantly so) that what the house could actually sell for.

What to watch for to protect yourself:  If you get one quote that is significantly lower others, ask to see the RCE.  Look and see if the RCE is the same as others.  If it is lower then  you can look and see if the features of your home are listed on the RCE used to create a lower premium quote.  Does it list the correct square footage?  Are porches included?  If you have granite counter tops or marble flooring, is it included?

How this helps you to avoid an unexpected bill or additional premium:  If your agent gives you a quote based on an RCE that is too low, your insurance company will likely find that during their inspection and will bill  you for the additional premium based on the RCE that uses the features of your home.  If your quote is seemingly too good to be true, be sure that you won’t be getting billed an additional amount later on down the road.

Wind Mitigation Credits:  What are they?  Wind mitigation credits are applied to homeowners policies that have met certain criteria.  The first criteria is that there has to be an inspection done by an approved inspector.  That inspector will be looking at items including the age of the roof, how the roof is attached to the tresses, the shape of the roof, among other things.

What to watch for to protect yourself:  When you receive your quote, look at it and see whether or not it includes “wind mit credits”.  If it does include wind mitigation credits, be sure that you have had a wind mitigation inspection done and that you have signed it.  This is different from a 4 point inspection.  If you are planning to have a wind mitigation inspection done soon, ask whether or not it is likely that you will qualify for any wind mit credits.  If your quote does include wind mit credits but you don’t qualify, you will be billed the difference at a later date.

Contents Replacement Costs:  What does this mean?  Your policy may insure all of your “stuff”.  You need to know whether you are insuring your material items for “actual cash value” or “replacement cost”.  Actual cash value means that if you have a couch that is 10 years old, you will be collecting an amount that has been depreciated.  Replacement cost means that you will be collecting an amount to buy a couch.

What to watch for to protect yourself:  Look at your quote and be certain that under contents and replacement cost that there is a “yes” if you are expecting to replace what you had.  If one quote is much lower than others, be certain that you are actually insuring yourself the way you think that you are.

We have all been there; we buy clothes that are a bargain only to have them fall apart, we eat less expensive food and end up dissatisfied, we buy sale items that we didn’t even need because it was a great deal.  Insurance can be frustrating enough.  Don’t find yourself in a situation where you think you are getting a great deal only to find that later on you get an additional bill. 

Be certain that when you get multiple quotes that they are in the same ball park.  Be certain that you are insured by a financially strong company.  Be certain that you can trust your agent.  Because isn’t that what you really want?