Why
does the coverage on my homeowners/renters policy
keep going up every year?
Once
the replacement cost of your residence is determined
(in the case of a renter, the personal property limit)
the insurance company updates the replacement value
each year based on the (building cost) inflation
factor for your particular zip code. We are starting
to see large increases in the cost to build and rebuild
homes. Let us review the current building cost estimates
to determine if you are properly insured.
The replacement value of a home has little to do with the market value of the
home. The inflated California real estate market has once again created a situation
where the market value of a home may far exceed the cost to rebuild the home.
back to questions
Why
do I need renters insurance?
Whether you’re renting an
apartment, home or condo, renters
insurance
provides valuable coverage for
you and your belongings.
A renters policy protects
your personal property against fire, theft or damage and may pay
for temporary living expenses if
the
residence is damaged. It also provides
liability coverage
in the event you are sued for bodily injury or property damage (non-vehicle
related).
Even though the property owner or property management company
has insurance, their policy does not cover you or your personal
property.
back
to questions
I
have a roommate; do we both need renters
insurance?
A standard renters policy covers you and relatives that live with you. If your
roommate is not a relative, each of you should have your own policy to cover
your own personal property and provide liability coverage for your own actions.
back to questions
I
received a letter from my mortgagee
saying that they didn’t get a copy of my policy.
Don’t you send a copy of my
policy to them?
"Mortgagee" copies of insurance policies are usually sent directly by the insurance
company to the lender. Unfortunately, lenders tend to change addresses
frequently or they sell the loan to another lender and fail to notify the insurance
company.
We suggest that if you receive a notice from any party wishing evidence of
your insurance, that you mail or fax a copy of the request to our office. We
will send a copy of the request along with the evidence to your lender.
back to questions
I
am thinking of canceling my earthquake
coverage but I’m afraid of
what would happen if a fire started
as a result of
an earthquake. Would I have coverage?
YES. According to most insurance
company adjusters, if a fire
started as a result
of an earthquake and you didn’t
have earthquake coverage on your
home, the insurance
company would pay you for the
damage to your home after
the earthquake but before the fire.
In practical application, it would be very difficult to tell what condition
your home was in if it burned to the ground.
back to questions
How
do I determine the value of my personal
property for a renters policy?
Walk from room to room in your home or apartment and list the values of the
most expensive items in each room. Estimate what it would cost for you to replace
the items today. Then, total your costs from each room. This should give you
a good starting point.
back to questions
Am
I covered if my personal property
is stolen from my car or my hotel room if I’m
on vacation?
Your homeowners/renters policy provides worldwide coverage for your personal
property. However, there may be limits for certain types of belongings (i.e.
jewelry, cash and watches). Please contact our office or refer to your policy
for limitations.
back to questions
What
is the difference between "actual cash
value" (ACV) and "replacement cost"?
When a loss is paid using ACV,
the policyholder is entitled
to the depreciated value (the
cost to repair/replace the property
less depreciation) of the damaged
property. When a loss is paid using replacement cost, the policyholder
is entitled
to the amount necessary to repair/replace the damaged property with
one of "like
kind or quality" at current prices.
We recommend you always carry replacement
cost coverage for your dwelling and/or personal property.
back to questions
How
are the coverage limits determined on my
homeowners policy?
In most cases, the dwelling limit (coverage A) on your policy is used as the
basis in determining the rest of your coverage limits. On a basic homeowners
policy, the remaining limits are calculated as follows:
| Other
Structures (coverage B) |
10%
of coverage A |
| Personal
Property (coverage C) |
70%
of coverage A |
Loss
of Use/Addt'll Living Expense
(coverage D) |
20%
of coverage A |
| Liability
(coverage E) |
usually
$100,000; $300,000 or $500,000 |
| Medical
Payments (coverage F) |
usually
$1,000 or $5,000 |
These
percentages can vary by carrier. Please contact
our office or refer to your policy for specific
information.
back to questions What
is the difference between an "all risk" policy
and a "named peril" policy?
A named peril policy provides coverage
for losses that are due only to
the covered perils
listed in the policy. An all risk
policy provides coverage for
losses due to any peril except those that are specifically excluded
in the policy. An "all risk" policy provides much broader protection than a "named
peril" policy.
back to questions
What
is loss assessment coverage?
If you own a home or condo and are a member of a homeowners or condominium
association, this coverage is especially important to you. Homeowners/condo
associations have the ability to charge (assess) each property owner fees to
cover losses to common areas or to meet the association policy deductibles.
In the event you are assessed as a property owner, the loss assessment coverage
can be used to meet that obligation. Typically, policies include $1,000 or
$5,000 of loss assessment coverage; however, this limit can be increased to
as much as $50,000.
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