Make sense of your home insurance

Rebuilding cost is not the same as sale price

A dwelling limit should be evaluated against the cost of rebuilding, not simply the purchase price, mortgage balance or land value. Ask how the estimate was prepared and whether ordinance or law coverage and any extended replacement-cost provision apply.

Personal property, additional living expenses and liability may have different limits and conditions. Valuable items can have special sublimits. Inventory belongings and check whether the settlement basis is replacement cost or actual cash value, which may account for depreciation.

Identify causes of loss and special deductibles

Flood is typically excluded from standard homeowners insurance; separate flood coverage may be available. Earthquake, sewer backup, wear and tear and gradual damage require careful review. A sudden pipe event and rising surface water can involve very different policy language.

For example, a percentage wind or hurricane deductible may create a different contribution than a flat deductible. Ask what value the percentage applies to and whether the deductible applies per event. Do not calculate the amount from a percentage without confirming the policy’s basis.

Review changes before renewal

Read renewal terms and notices for changes to deductibles, roof settlement, coverage or premium. If you receive a nonrenewal notice, the available process depends on state rules and your insurer. Verify dates promptly rather than relying on a generic appeal period.

Klint’s optional reminders use the date you enter and appear when you visit your account. They are not insurer notices or a guarantee that a policy remains active.

Frequently asked questions

Sources

• NAIC: Homeowners insurance
• NAIC: Flood insurance