What You May Not Know About Your Homeowners Insurance Policy

When you own a home, you take every possible step to ensure your home is protected. You may invest in a fire and burglar alarm to keep vandals away and the best locking windows to deter intruders. You should take proactive steps to ensure your homeowners insurance NJ is also protecting you. Unforeseen events happen. Unfortunately, you can take every step possible to prevent a loss and a loss can still happen. It is important to understand how your policy will pay you in the event you experience a fire or another catastrophic event. Below are three very important things to consider when you are reviewing your insurance policy.

Does Your Policy Carry Extended Replacement Cost Coverage?

If your house were to burn down tomorrow, do you know how your insurance company would value your home? Most policyholders assume their dwelling coverage limit is high enough to rebuild their home if the home was deemed a total loss. This is not always the case. To ensure you are protected against inflation, you should check to see if your home insurance policy includes extended replacement cost coverage. This will provide you with either 25 or 50 percent more coverage to cover the cost of inflation for labor and materials. If you do not have this coverage, you may have to cut corners during your rebuild.

Will Your Policy Pay to Replace Your Belongings

Personal property coverage pays to repair or replace your belongings that are not permanently fixed to the dwelling. This includes electronics, furnishings, clothing, appliances, and more. Most policies provide 75 percent of the dwelling coverage in a homeowners insurance NJ policy. It is important to consult your agent to see how your personal property is valued. If the company values claims with Actual Cash Value, you will be paid the depreciated value of your belongings. Ask your agent if you can switch valuation to replacement cost so that you receive how much it costs to replace the property at the time of the loss.

Do You Have Coverage To Stay in a Temporary Residence?

If you cannot live in your home because of a loss, Loss of Use coverage will provide you with the funds you need to live elsewhere. Some insurance companies put a dollar limit on this coverage, while others put a time limit. Be sure the company is willing to pay for temporary living costs for up to 24 months. This gives you plenty of time to rebuild your home.

Knowing how your homeowners insurance NJ will pay you is important. You may assume you are covered when you actually are not. Sit down with your agent and ask these important questions. Once you are informed you will have greater peace of mind.

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