Home Insurance
- Thread starter zthiel
- Start date
I would suggest taking out a policy that carries dwelling replacement cost coverage as opposed to actual cash value coverage. The big difference being actual cash value will pay the depreciated value of the damaged item (minus your deductible), where as replacement cost will pay to replace the damaged item (minus your deductible), ie your roof. Actual cash value could leave you holding the bag for thousands of dollars in repairs the insurance company won't pay for due to you losing the "depreciated" part of the claim. Replacement cost is more expensive, but you'll be thankful you have it the first time you get hailed out. Talk to your agent.
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How old is the roof? Many companies won't insure homes with older roofs(15+ years) at all. Others will only offer actual cash value(acv) coverage on homes with older roofs. Some companies will offer replacement coverage on roofs until they reach a certain age. Then they will automatically switch to acv coverage. If the seller has any documentation relating to age of the roof (i.e., a paid receipt for full replacement) ask for it. Sometimes, your insurance company will ask for proof of replacement. Doesn't happen all that often but is a good idea to have that proof in hand. Age and quality of roof is VERY important to home insurance.
Be aware of wind/hail deductibles. Many companies will require a 1% wind/hail deductible. Here's an example:
Your home will most likely be insured around 250k. That estimate is based solely off the square footage you provided. Could be significantly higher or lower depending on specific characteristics. 250k is the estimated replacement cost of the home. You could have a $1000 deductible for all covered losses except wind/hail and 1% for covered wind/hail losses. The 1% wind/hail deductible is 1% of the dwelling coverage (250k). That means you will have a $2500 deductible for covered wind/hail losses. Every year, your dwelling coverage will be adjusted for inflation so your wind/hail deductible will adjust accordingly as well.
