The Right Homeowner’s Insurance?
Fire season. Tornado season. Hurricane season. Ice storms. Floods. Do You Have The Right Homeowner’s Insurance? Do You Know How To Get The Most Reimbursement on Claims? Beware “Amendatory Endorsements” such as the type appearing in Allstate and others’ policies. Read the entire policy. These endorsements don’t get disclosed to you in pricing or buying a policy. They come buried in the back of the policy legalese. Consumers must hunt through the fine print since the Amendatory Endorsements take away much of the coverage you thought you had.
Homeowner insurance commercials blanket the airwaves; TV and advertising tout savings of hundreds of dollars a year. In some cases that’s true. In others, the lower price reflects worse insurance coverage. Dropping Replacement Cost insurance to Actual Cash Value (ACV) saves money. But it increases risk of a major out-of-pocket expense. Choose the right limits, right coverages, and right deductibles. You want to balance annual premiums with costs when damage occurs. Hint, many insurers in states with high roof claims (windstorm, hurricane, hail) sneak in Amendatory Endorsements. These endorsements effectively switch coverage from real coverage to the lesser ACV. ACV can be a bad deal for your roof coverage and might provide coverage equal to $0! Winning Mortgage, Winning Home explains how this can happen and how to avoid it.
Initial Claim Payment
In 2021 an unusual winter storm affected Texas and other areas, causing substantial damage. How does one get the highest insurance payout, negotiate a claim, and get the repairs done? Without some money in the bank, the process of repairs slows down or stops. Home owners normally must pay the first part of repairs before insurers pay their part. Any claim check will be made out to the borrower and the mortgage lender. The lender generally requires a number of things to happen before the borrower sees a penny of money from the claim.
For a claim, the initial payment only totals an amount equal to ACV less your deductible. And this money will have to be signed over to your lender. As a result, there is $0 to start the repairs. Starting the repairs usually requires money in the bank since the first payment comes from your pocket. On any claim, work to get money from the insurance payment held by the lender to pay the contractors instead of from your pocket. How can you do this? Then, how does one get more money (the difference between ACV and replacement cost) for the repairs? What if the repairs can’t match the rest of the undamaged parts (tile, cabinets, etc)-can you get more money?
Learn Best How To Manage Coverage, Claims and Reimbursements
Find out how to manage the claim process, ACV, replacement cost, depreciation, deductibles, co-insurance and contractor payments in Winning Mortgage, Winning Home. Hint, when filing a claim, only ACV and depreciation come into play until repairs of the damage actually happen!
Buying insurance over the internet can seem like a way to save money. But what about service for claims? And what about insurance adjusters and flexibility? Can an agent provide more personal help or just spout the company line? How fast can a claim be paid to start repairs? Make sure to get the right homeowner’s insurance. NOTE: We do not sell insurance or steer you to a specific company. We have no financial interest in which company you select. Pick up a copy of the book and sleep better.