The amount of deductible you pay the insurance company when making a claim will impact the cost of your policy. Generally, you can choose between a $500, $1000, and $2500 deductible.
Actual replacement cost will replace the item that was damaged with a new product similar to said item. If your policy is replacing with “Actual replacement cost”, the insurance company will pay for the cost of new windows.
Actual cash value will only pay you what that item is worth today. For example, your windows are 10 years old and they have been damaged by hail If your policy uses “Actual cash value” the insurance company will depreciate the value of the windows on your home and may only cover half of the cost to replace the windows.
Be sure to take note of the limit of coverage that the insurance company has on the contents of your home. Some policies come standard with a limit of only $10,000. When you factor in your appliances, window coverings, electronics, jewelry, clothes, children’s toys, tools, sporting equipment etc, you may need upwards of $100,000 coverage.
With my own home policy, this coverage was limited to $10,000. I had to specifically ask for this to be increased to be suitably insured against this type of damage.
This coverage is extremely important and again you have to take note of the limit for this coverage. With my own home policy, this coverage was limited to $10,000. I had to specifically ask for this to be increased to be suitably insured against this type of damage. If your entire basement floods from a sewer backup, that’s going to be a costly bill!
This is a tricky one because insurance companies have 2 different classes of flooding.
- Overflow of a body of water – This will only cover damage to your home if a river, lake or pond overflows causing damage to your home. If there are no bodies of water near your home, you might want to ask them to remove this coverage to save you some money.
- Above ground water – This generally provides you with coverage in the case of melting snow, or heavy rain making its way into your home. This coverage is sometimes an add-on that you have to specifically ask for. Years ago, a rental property of ours flooded from heavy rains and we unfortunately did not have this coverage. Don’t let that happen to you!
It's quite common for insurance companies to have a higher deductible when making a claim caused by wind or hail damage. It's also quite common for them to depreciate the replacement cost of shingles. Again – speak to your insurance agent and be sure to know the details of your policy.
