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Home Insurance FAQ

What's the right amount of insurance for my home?
Your coverage should match the value of your home. Homeowners insurance cannot cover the land your home is on, only the structure. That means that the insurance amount could be less than the purchase price or loan amount.

What's the difference between the "actual cash value" and the "replacement cost"?
Actual cash value and replacement cost describe payment of covered losses through your homeowners insurance policy. If your policy uses an actual cash value determination, you are entitled to the depreciated value of damaged property. If your policy uses the replacement cost determination, you'll receive the actual cost to replace damaged property at current prices.

Is my personal property covered if it's not at my home during the time of loss?
Your homeowners insurance policy Coverage C, or the named perils coverage, describes personal property coverage anywhere in the world. For instance, if you make a household purchase abroad and ship this home, your policy will cover your purchase in transit even if the property has never been in your home.

Does my homeowners policy protect against earthquake damage?
Earthquake damages are not covered under standard homeowners insurance. If you are at risk, add an earthquake endorsement to your policy that covers damages caused by earthquake, landslide, volcano or other land movements.

What about flood insurance?
If your property is officially designated as being in a special flood hazard area, you must obtain flood insurance. While the federal government provides most flood protection, you are responsible for applying and obtaining this coverage. It's important to know that flood insurance is not included in a standard homeowners policy. Even if your home is not in a special flood hazard area, you may wish to consider whether you need flood insurance.

What's the difference between all risk and named perils policies?
All risk and named perils policies cover different causes of loss. A named perils policy covers your losses resulting in the perils listed in your policy, typically including ire, hail, windstorm or other physical losses. An all risk policy offers broader protection covering losses resulting from any peril except those specifically excluded in your policy.

What are policies regarding mobile homes?
Mobile home policies can be covered under a replacement cost, actual cash value or stated amount. A stated amount policy covers an agreed upon amount at policy issue regardless of depreciation value. If you choose a stated amount policy, review and update terms annually to ensure replacement of your mobile home will be done at a realistic price.

What is an extended or guaranteed replacement cost policy?
If your home is destroyed beyond repair, your insurance policy typically covers the value of rebuilding your home. An extended or guaranteed replacement cost policy protects within a certain percentage above in the event building expenses have risen unexpectedly.

What about special items such as jewelry, works of art, etc.?
A homeowners insurance policy will frequently limit coverage on some special items jewelry, currency, works of art, etc. Homeowners who need additional coverage on these items can usually obtain it for an additional cost.

If I have an accident I think is covered under my homeowners policy, what should I do?
Insurance contracts are conditional contracts, which means policy owners have certain responsibilities to meet if a covered loss occurs. Not completing these can result in non-payment by the insurance company for losses that otherwise would have been covered. First, notify the insurance company or the agent that a loss has occurred as soon as you discover the loss. Second, protect the property from further damage and/or make any repairs necessary to prevent further damage. Third, prepare a detailed list of the personal items damaged that contains descriptions, the items' actual cash value, or their replacement cost if you have added the replacement cost endorsement to your policy. Fourth, be prepared to show the company and/or the insurance agent the damaged items. Complete a statement for the insurance company that explains how the loss occurred, for example, the time the damage occurred, the cause, etc.

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