Changes in Your Homeowners Insurance Coverage
What May Be Changing in Your Insurance Policy
Insurance companies are implementing several coverage changes, and it’s important to know what may be changing in your policy.
Below are some items to consider if you have an upcoming insurance renewal. This information is courtesy of North Risk Partners Personal Insurance.
Roofs
Some insurance carriers will no longer pay for a full roof replacement for damage to shingles caused by wind and hail. Reduced payments may be shown on a “Roof Schedule” that is made part of the policy. Others may transition to Actual Cash Value (depreciation applied) based on the age of the roof. Metal roofs and roof components are not typically covered if the damage incurred is cosmetic only.
In addition, some carriers provide a discount if you’ve recently replaced your roof, so be sure to let your insurance agent know if your roof is newer.
Insurance Policy Deductibles
Some carriers are increasing the minimum policy or coverage deductible offered. Many companies are now modifying their homeowner policies by applying separate wind/hail deductibles. These are different then your policy deductible and could be a percentage of the value of your dwelling. It’s important that you review your policy to identify what type of deductible you have.
Matching
You may see that your policy excludes the additional cost incurred to match obsolete siding and roofing material with new materials used to make repairs. Endorsements that provide coverage are sometimes available. These can be valuable when it comes to the costs of maintaining the aesthetic of your home.
Loss Assessment Coverage
If you live in a homeowner’s association, it’s important to know what the association is responsible for insuring as well as what you are responsible for, including the association deductible that could be assessed back to you as a home or unit owner.
You should receive updated documents from your association each year. It’s now more important than ever to review these and make sure you have adequate coverage for this on your insurance policy.
Additional Optional Coverages
Service Line Coverage, Equipment Breakdown, and Inland Flood are a few optional home coverages to consider. Contact your insurance agent to explore any of these additional coverages.
Backup of Water and Sewer
Did you know the average water damage claim is five times more likely than a theft claim and 13 times more likely than a fire claim? In addition, homeowners who must vacate after a water loss spend an average of nearly four months away from their home.
According to the Minnesota Department of Commerce, The Sewer Backup Coverage endorsement will vary from company to company. Some insurance companies will cover the damage caused by a sewer backup even if it floods. However, some will exclude coverage for sewer backup if it happens at the same time as a flood. You should check in with your insurance agent to see how your policy will respond.
Replacement Cost Coverage
It is a condition in the policy to insure your home for at least 80% of its reconstruction cost to receive a replacement cost loss settlement. Could you rebuild your home for its insured value? Have you made any home improvements that may have impacted the replacement value? If needed, make sure you re-evaluate your reconstruction costs, review coverage limits, or increase your coverage.
Docks and Boat Lifts
Your coverage may change depending on whether docks and boat lifts are on your property, permanently installed or portable, and in or out of the water when damaged.
Billing
If your mortgage company pays your home premium by escrow, make sure your records show the correct lender. If you are set up for electronic funds transfer (EFT) or credit card payment, be sure to let your insurance agent know if your bank or credit card number has changed.
Not on EFT? Recent postal delays may make this a good time to consider this option. Automatic payments may also save you from additional billing fees.
Review Your Insurance Policy
The coverages, changes, and exclusions listed above are a summary of the most common policy changes beginning to be seen in the insurance industry. Additional changes may apply to your situation.
Insurance companies are required to mail you advance notice of changes in policy provisions that will apply to your renewal. These notices can be included with other billing and account information. You should read through your policy carefully to make sure you’re fully informed on any changes in your coverage.
