Is your Homeowner’s Insurance Sufficient to Weather Storms?
In Minnesota, the number one cause of loss for homeowner’s insurance claims is damage from wind or hail. With that in mind, it’s important to make sure your homeowner’s insurance coverage is enough to weather any storm!
To find out what your homeowner’s insurance policy covers, contact your insurance provider. They can tell you what is covered in the event of storm damage. Ask specifically how a claim for hail or wind damage would be paid. Are you covered for the replacement cost of a new roof, for replacement cost of the damaged portion only, or the actual cash value of your roof at time of loss?
The types of coverage for roof damage due to wind or hail may include:
- Coverage for “partial loss” – if only one side of your home is damaged; only one side will be repaired. Depending on the insurance company, they may or may not pay for cosmetic matching of the undamaged portion of the home, which can result in a two-toned home!
- Coverage for replacement cost versus Actual Cash Value (depreciated coverage). Your roof (and siding) may or may not be covered for replacement cost. For instance, if your 12-year-old roof is damaged by hail, your coverage may include the replacement cost of a new roof. Some policies, however, may only cover the “current value” of your roof (which might be as little as $1,500, depending on the age of your roof). You would be responsible for the remaining replacement cost, which could be as much as $10,000 or more.
- Percentage deductibles for wind/hail – some companies require you to have a percentage deductible for wind/hail damage. This may seem minor at 1% or 2%, but that doesn’t mean you only pay for 1% of the damage. It means that you pay 1% of your policy limit at the time of loss. So, if your home is insured for $425,000, that means a 1% deductible = $4,250 out of pocket for you. In the event of hail damage, you would pay the first $4,250.
As you can see, coverage can vary widely. Make sure you understand what would happen in the event of a storm, and determine whether or not you can afford the type of coverage you have. You may be able to afford the cost of your homeowner’s policy as is, but if your coverage is insufficient in the event of a storm and serious damage occurs – can you afford to pay the majority of the replacement cost of your roof?
When it comes to homeowner’s insurance, coverage is more important than cost. Protect your most important investment ─ your home. Call your insurance provider today to determine if you need to change your existing coverage or find a new plan.
Guest blogger Laura O’Neill, owner of Cornerstone Insurance Agency in Victoria, Minnesota, has been in the insurance industry for more than 15 years and has a background in real estate and financial services.