What is recoverable depreciation on a roof claim

After you make a roof claim the insurance company claim rep will provide you an estimate to replace your roof and the company will issue a claims check

But the claims check will not be for the full amount to replace your roof

It will have an amount that is deducted from the estimate

This is depreciation based on the age of your roof

Your first check will include a deduction for depreciation

 

It is ok to deposit your first claim check

 

This does not close your claim or prevent you from recovering the full amount to replace your roof

The second check you receive is called recoverable depreciation

 

In order to get the second check you must show the insurance company you replaced your roof

You can send photos and an invoice to your insurance company claim rep and they will issue the remaining amount needed to get your roof replaced

 

You must have Replacement Cost on your policy to receive the second claim check

 

Some insurance companies do write new homeowners insurance policies and place an ACV (actual cash value) endorsement on the policy

So check with your agent to determine if your have a replacement cost policy

 

If you have an ACV endorsement your roof claim check will be based on depreciation calculated on the age of your roof

The older your roof the more the insurance company will deduct from your claim check and you will not be eligible for the second check which is recoverable depreciation

 

What is your Hurricane or Wind Deductible?

The homeowners insurance deductible is not the amount you pay but the amount the insurance company deducts from the claim check.

 

HURRICANE DEDUCTIBLE

If you have a % deductible such as 2% hurricane deductible the insurance company will deduct 2% of the insured dwelling amount from the claim check

Example you have a 250,000 home with a 2% Hurricane Deductible

250,000 x 2% = $5,000

Your insurance company would deduct $5,000 for any hurricane related damage claim check

You would be responsible for the first $5,000 of damage to your home

If your hurricane damage estimate is below $5,000 you would not receive a claim check for damages from your insurance company until your damages exceed $5,000

The Hurricane deductible only applies to a Hurricane damage related claim

Tropical storms would not apply

 

NAMED STORM DEDUCTIBLE

Would apply only if the wind damage is from a storm with a name including Tropical storms and Hurricanes 

 

WIND/HAIL DEDUCTIBLE

Your wind or hail deductible would apply the same way as above but it would apply to any and all wind claims including Tropical storms and Hurricanes

Any wind damage regardless if the damage is from a Named Storm your wind deductible would apply

The claims process

The Claims Process after a Hurricane

Here is a claims process after a hurricane and I will post each day walking you through the steps including understanding deductibles and recoverable depreciation

 

1. File a claim

2. Speak with your claim rep

3. Claim rep inspects your property

4. Claim rep writes the estimate

5. Claim check is sent

6. Hire a contractor

7. Contractor may have more damage than initial estimate

8. Send Claim rep supplemental estimates

 

Just remember your first claim check does not indicate it is your last claim check

just because you cash the first check does NOT conclude your claim unless you sign a property damage release form…

but no claim check from your own insurance company would include a release form

 

CASH YOUR FIRST CLAIM CHECK

 

I was an auto claim rep for years before I opened FM Agency Group

When your car is damaged the body shop writes the initial estimate but often there would be supplemental estimates (more damage discovered)

I will explain more in detail about supplemental estimates and recoverable depreciation but for now get your claim filed

 

FILE A ROOF CLAIM

click on the link below

file a claim

Hurricane Laura relief help

Living in New Orleans no one understands more about what it is like after a hurricane

Loss of power for days or weeks

Stores closed and the streets are quiet at night

I still remember the smell after Hurricane Katrina

The mold and trash piled up for weeks in the street as most homeowners were pulling up carpet and sending their duct taped refrigerator to the curb

When a hurricane hits another community like Hurricane Laura did to Lake Charles my heart sinks

The damage looks horrible and some residents are going home to nothing

 

HOW CAN YOU HELP?

I ask myself this every time after a disaster

I’m like most I want to help but I don’t want the money wasted

I don’t want 1% of my contribution going to the people in need and the other 99% to pay the charities operating costs

You can research a charity using Charity Navigator or Guidestar

and if you detect fraud you can report it to the National Center for Disaster Fraud

 

I was doing some research over the weekend…checking social media posts and reading up on websites

 

HERE ARE THREE THAT MIGHT BE THE PLACE TO SEND YOUR DONATION

There are many to choose from and in no way are these the only three

Like me we can give to all of them but pick one and send what you can is my thinking

SBP

SBP is an organization that provides the assistance to disaster-impacted families in need and was founded after Hurricane Katrina in March 2006

Read more in the about us section

Where does your money go?

Your donation provides

$100 – provides protective gear to 10 volunteers

$250 – funds 3 kits to muck/gut flooded homes

$500 – helps SBP reach 1,000 homeowners with disaster preparedness education

$1,000 – deploys a team of AmeriCorps members to support disaster recovery

 

COMMUNITY FOUNDATION OF SOUTHWEST LOUISIANA

In direct response to Hurricane Laura this is an organization that will distribute funds to non profits that have proven to help when disaster strikes

Where does the money go?

Disaster grants pay for food, shelter, medicine and all other necessities that help stabilize those in most immediate need

http://www.foundationswla.org/hurricane-relief

 

SECOND HARVEST FOOD BANK

This is a local favorite that helps provide food for the hungry. 

They provide 34 million meals annually to people in need

They have boots on the ground in the Lake Charles area 

Every $1 donated provides 4 meals to someone in need

Donate now to Second Harvest Food Bank

 

NATIONAL ORGANIZATIONS

If you prefer to contribute to national charities 

Salvation Army 

Red Cross

Americares

United Way of Southwest Louisiana

Transfer of risk on homeowners insurance

A homeowners insurance strategy you can use is Transfer of Risk

You can transfer more of the risk to you when you take a higher deductible

The insurance company does not want you to make small claims

I see it every day….claims payouts as low as $500

 

Consider moving the risk from the insurance company to you

When you do this the insurance companies offers you a lower rate on insurance

The deductible is the amount the insurance company deducts from the claim check

The higher the deduction on the claim check, the lower rate you pay for home insurance

 

DO YOU MAKE HOMEOWNERS INSURANCE CLAIMS?

If you are someone that doesn’t make claims,

you need to consider a higher all other perils deductible.

All other perils deductible is any claim that is not a hurricane or named storm.

 

Here are some common home insurance claims where  the all other perils deductible would apply

-Water claims (not flood which is rising water from outside)

-Busted pipes

-Busted water heater

-Fire

-Theft

-Vandalism

-Smoke damage

 

WHAT ABOUT MY HURRICANE OR NAMED STORM DEDUCTIBLE?

Over the past few years this deductible which was once as high as 5% of your insured replacement cost value

Due to many homeowners insurance companies entering the Louisiana homeowners insurance market 

the named storm and hurricane deductibles can be as low as 1,000

Consider the rate difference on a 1000 deductible and a 1% hurricane or named storm deductible

If there is a savings you may consider the higher deductible

I’m sure another Hurricane Katrina and this low deductible option will go away

If the insurance companies are offering a low hurricane deductible you may want to get it while it is still being offered

 

UPC insurance company can now offer a wind deductible as low as $1,000

If you are looking for a large financially stable insurance company that writes in over 12 states and has the ability to pay claims 

UPC might be the answer for your homeowners insurance protection

 

 

What’s this all about?

Transfer of risk is not just a homeowners insurance strategy for wealthy individuals.

This is something you can do as well.

You can save a considerable amount of money over time by taking on a higher deductible and moving some of those savings to increase your car insurance liability and make sure you have the insurance protection in place to protect you, your family, your investments, your assets and most importantly your future earnings.

And remember only take on the amount of risk you can handle.

Insurance is used to protect you from a financially devastating event.

Raise your deductible to a level that would not hurt you financially.

If a $1000 loss is a financially devastating event,

don’t raise your deductible higher to save money on your home insurance rate

Insurance is to help you sleep at night knowing you are protected,

not to keep you up at night wondering if a claim is covered

 

My name is Tim D’Angelo and I can review your deductible savings strategy on home insurance

You can contact me at 504.348.3131 or complete the quick form

UPC insurance company earnings report

United Insurance Holdings (UIHC) reporting quarterly earnings of  $0.20 per share beating the estimate of a loss of $0.05 per share per the yahoo finance report

UPC United Property and Casaulty Insurance Company is a Florida domiciled insurance company operating out of St. Petersburg and writes in 12 States

At the end of 2019 net admitted assets surpassed 1 billion ($1,036,045,180) according to Demotech, a financial rating agency

UPC is one of the largest insurance companies writing homeowners insurance in Louisiana

you can learn more about UPC homeowners insurance and their rankings in the United States here

DOES UPC ONLY WRITE HOMEOWNERS INSURANCE IN LOUISIANA?

No.  They write Landlord Rental Dwellings

Flood Insurance

Tenant Renters Insurance HO-4

Condominium policies HO-6

 

If you own a home in an area that is susceptible to hurricanes like South Louisiana you need to know how strong is your insurance company.

Some questions to ask

Do they have the ability to pay claims after a hurricane?

Are they protected by the Louisiana Insurance Guaranty Association up to 500,000 per house?

UPC with net admitted assets over 1 billion to appear to have the financial stability needed in a coastal insurance market

 

THE CHEAPEST QUOTE CAN GET EXPENSIVE AFTER CLAIM

No insurance company is the cheapest on every home 

If they were they would be out of business the next time the wind blows

New companies do enter markets with cheap low rates but once the wind and claims come rolling in their rates either go up or they exit the market

We recently helped a client with their new home purchase and discovered his real estate agent had recommended their friend for insurance

The other insurance agent removed Replacement Cost on the roof and our client would have received pennies on the dollar on his next roof claim leaving him with not enough money to get a new roof

5 coverage options you need when buying a new home

SAVINGS ON HOMEOWNERS INSURANCE IS STILL POSSIBLE

Here is an example of a friend of mine living in Lakeview New Orleans Louisiana

He built a home after Hurricane Katrina like most in the neighborhood

He had been with a company for more than a few years but each year rates kept going up

He emailed me over this homeowners insurance declaration page and I told him we could save him $750 a year and get him much lower deductibles

He had a 2% hurricane deductible on a 300,000 home so the deduction off of his next hurricane claim check would have been (6,000)

We were able to get him a 2500 hurricane deductible

If you are looking for financial stability and claim paying ability after a hurricane United Property and Casualty Insurance company (UPC) might be the option you need

If you want a quote just click here to begin

6 things to do before you make an offer on a new house

Before you buy a house do these 6 things

  • Know your credit score
  • Get pre-approved not pre-qualified from a local lender
  • Find a realtor that knows the neighborhood
  • Choose your own home inspector
  • Understand the most important renovations
  • Get the lowest rate on homeowners insurance

UNDERSTANDING YOUR CREDIT SCORE BEFORE YOU MAKE AN OFFER

If you have credit issues or a low credit score there is no need to dream of owning a home until you get your score up

A higher score will allow you to afford more house and get a lower rate on home insurance which will result in a lower monthly mortgage payment

myFICO has a guide to help raise your credit score click here

Thousands of dollars can be saved over the life of loan even with a few points increase on your credit score

It all begins with knowing your credit score

 

GET PRE-APPROVED FROM A LOCAL LENDER

The conversation with a local lender is at no cost to you

The local lender is the guide to help you make a decision if you can buy a home

Most potential homebuyers like to skip this step and talk to a real estate agent

Yes a real estate agent is happy to speak with potential homebuyers but in reality you can’t buy a home unless you know how much home you can afford so any real estate agent that is serious about helping you buy a home will tell you “talk to a local lender”

Local lenders will verify employment, income and your credit score

Local lenders work with your real estate agent to develop the steps needed to get you to the closing table

If you are not ready the local lender will usually have a game plan to get you ready to buy

If you are interested in talking with a local lender here is a recommended local lender with PrimeLending Jason Pippenger

 

FIND A LOCAL REAL ESTATE PROFESSIONAL

Remember that a real estate agent works for free when you are buying a home because the seller pays your real estate agent’s commission

You get a professional real estate advisor to help you through all phases of the homebuying process at no cost to you

You want to find a real estate agent that understands the neighborhood you are interested in

There are many guides to help find a local realtor but realtor.com has an agent finder site that will allow you to input your interested zip code and it will list real estate agents

You can research by homes sold and homes listed

Local lenders work closely with the top real estate agents in an area so asking your local lender is a good idea

 

CHOOSE YOUR OWN HOME INSPECTION COMPANY

Real estate agents are asked daily from numerous other companies basically begging for referrals

You want to find an independent home inspection company that is not afraid to tell you what is wrong with the house

Would you guess that the majority of homebuyers never read the home inspection report

Why?

Because it is a report of everything that is wrong with house

One homebuyer I was speaking with referred to the home inspection report as the “deal killer”

Another homebuyer bought a house with termite damage because she never read the inspection report and after the closing the home insurance company canceled the policy because termite damage is not covered on a home insurance policy

A local independent home inspection company is Spotlight Home Inspection

 

UNDERSTAND THE MOST IMPORTANT RENOVATIONS

Before you buy a house you need to know the exact year of the update or replacement to the

  • Roof
  • Plumbing
  • Electrical
  • Heating A/C (HVAC)

These are all major discounts on your homeowners insurance

The more recent the replacement of the above items the less you will pay annually for home insurance which will result in a lower monthly mortgage payment

 

FIND THE LOWEST RATE ON HOMEOWNERS INSURANCE

Homeowners insurance rates vary by state, zip code and in some cases…by neighborhood

A homebuyer in Hammond could pay $1,000 less for home insurance on the exact same house in New Orleans

Factors that affect the price you pay for homeowners insurance including, but not, limited to

  • Year built
  • Age of home
  • Age of roof
  • Age of plumbing repair/replace
  • Age of a/c heating (hvac) replacement
  • Circuit breakers update
  • Age of homebuyer
  • Credit Score or Insurance Score
  • Shape of Roof (hip shape is better)
  • Brick or Frame siding

 

If you are ready to buy a new home and need to know the lowest rates on home insurance click on the button below

GET QUOTE

Homeowners Insurance coverage options you need

When I’m talking to a New Orleans homeowners insurance resident and I’m reviewing their current coverage on their policy I often see missing coverage options that are important

A homeowners insurance policy does not cover everything but the insurance company does offer add on options you many not know about

Most insurance companies writing in Louisiana will use an HO-3 policy form but this policy does include all the coverage you need

You must add on or endorse the policy to get the coverage to protect your home and your bank account

GET QUOTE 

Here is a review of the most common endorsements available on a New Orleans homeowners insurance policy

 

Animal Liability Endorsement

Equipment Breakdown Enhancement

Personal Injury

Water Back up and Sump Discharge

Personal Property Replacement Cost

Service Line Endorsement

Refrigerated property

Mandatory Evacuation

The cost of a homeowners insurance policy with the endorsements above could be the difference of $100 additional per year

 

ANIMAL LIABILITY 

Even if you don’t have a dog at this time, you should consider adding this endorsement.

The usual cost is $50 a year.

This endorsement will add usually a sublimit of coverage starting at 25,000 towards a defense of an alleged dog bite claim on your property.

Most dog owners believe “my dog would never bite anyone”.

Just remember this is not dog bite liability only

Your dog could get excited and jump on someone and cause an injury too

 

GOLF CART ENDORSEMENT

Obviously if you don’t own one or intend to own one this may be an easy decision but just remember if you do buy one, check with your agent to make sure its covered.

Some policies offer this endorsement but had some requirements in order to pay in claims

“The golf cart must be used in a gated community”

or

“The golf cart is covered if used in a neighborhood or community with a golf course”

Most homeowners policies exclude coverage because you can buy a stand alone Golf Cart policy that will cover liability and property coverage and the policy usually begins at $150 for year

Agent Tim Tip: Don’t depend on your homeowners policy to give you the coverage you need if you are driving a Golf Cart around your neighborhood

 

ORDINANCE OR LAW COVERAGE

Usually a percentage 10%, 25% or 30%, this endorsement will cover any improvements to the repairs to your house after a claim because of a building code requirement that was not in force when the house was built.

ex) If your house was built in 1985 and you have a claim today, its safe to say you would have to rebuild your house to the new building code enforcement.

When the house was built were hurricane straps required on the roof?

Are they required today?

If so, the estimate would not include the cost of installing roof straps because your house did not have any but the new code in Jefferson Parish or Orleans Parish may require you to do so.

Check with a local contractor and ask if the building codes in your Parish have changed since your house was built.

Most New Orleans homeowners insurance policies include a % such as 10% of the insured dwelling limit to be used for this type of issue in the HO-3 Special Form policy.

 

EQUIPMENT BREAKDOWN

Most often this is the endorsement that gives coverage for the complete breakdown of your a/c unit or appliances but will exclude for wear and tear

If you have a home warranty policy you would be covered for wear and tear

The mechanical breakdown of the equipment in your house is usually subject to a special deductible.

Most often $100-$500 and there is a sublimit of damages

Could be a limit of around $50,000 of damage

The cost of this endorsement could be as low as $20

 

PERSONAL INJURY

This coverage can add protection against any alleged Libel or Slander claims.

This coverage is needed more today with the popularity of social media.

People say or type the craziest things on social media these days.

Do you know what your child is typing on Facebook?

If a claim is brought against you for something that was said (slander) or written (libel) about another person your personal injury coverage would apply

Without this endorsement or coverage you would be left paying for your claim defense out of your own pocket

Some home policies have a sublimit such as $25,000, so check your policy.

Most insurance companies like UPC insurance company will add personal injury as the same limit as your current liability limit for as low as $50

to see a list of Insurance Companies writing in New Orleans click here

WATER BACKUP COVERAGE

This endorsement is coverage for direct physical loss, not caused by negligence of any “insured” to property covered under Section I of the policy by water or water-borne material which

Backs up through sewers or drains on the “residence premises”

Overflows or is discharged from a sump, sump pump or related equipment, even if such overflow or discharge results from mechanical breakdown

Coverage does not apply to direct physical loss of the sump pump or related equipment which is caused by mechanical breakdown

The claim may be subject to a special deductible starting at $250 on some home insurance policies

What about an accidental water claim such as (caused by negligence)

  • overflow of a toilet
  • overflow of a bathtub
  • frozen busted pipe resulting in water damage

These type of accidental claims are covered under the home insurance policy as water damage and are not subject to a Water Back Up Endorsement because the water issue did not originate through sewers, drains or discharges from sump, sump pumps and related equipment.

Common claim is the sewer line under the slab will collapse and water can no longer leave your home and it backs up into your bathroom or kitchen

The resulting water damage would be covered by the water backup endorsement and amount of damage could be limited to $5,000 to $25,000

Check your New Orleans homeowners insurance policy for the limit 

SERVICE LINE ENDORSEMENT

This coverage will actually replace the sewer line plumbing under your slab to the street

Without this coverage you would be left paying for the replacement of the sewer line to the plumber

Most customers believe the sewer line running from the street to under their house is the responsibility of the parish but it’s not 

This endorsement can provide up to $10,000 of coverage and it covers tree root intrusions and corrosion which would normally be excluded under a homeowners insurance policy

PERSONAL PROPERTY REPLACEMENT COST

There are two options offered to you on your contents or personal property.

  • Replacement Cost
  • Actual Cash Value

Replacement Cost allows you to replace the damaged item of like kind or quality.

So if you had a 5 year old 46” Samsung TV,

you could go out and purchase another 46” Samsung TV.

Actual Cash Value is Replacement Cost minus Depreciation

So if you had a 5 year old 46” Samsung TV,

the claims adjuster would deduct 5 years of depreciation from the replacement cost of a 46” Samsung TV.

Ex) 5 years of depreciation at $50/year = $250 deducted or depreciated

Replacement Cost is $500 for a new tv minus $250 depreciation,

You would receive a check for $250.

REFRIGERATED PROPERTY

Not all insurance companies offer this coverage but if there is loss of power and you lose all your contents in your refrigerator or freezer this endorsement would pay for the replacement

The limit can go up to $500 and the cost can be as low as $10

MANDATORY EVACUATION

This coverage will kick in if the parish orders a mandatory hurricane evacuation and you must leave New Orleans

You would be reimbursed for your hotel room up to the limit of either $1,000 or $1,500

Damage to your home does not have to apply in order to receive reimbursement if you purchased this coverage

 

So what’s this all about?

New Orleans Homeowners Insurance policies do not cover everything.

If they did you would receive one piece of paper from the insurance company when you purchased a new policy and that would be a receipt.

Instead you receive a thick policy full of exclusions and a description of what is not covered.

It is important you do an annual review of your homeowners insurance policy and coverage options

When you purchase your policy it is possible that some of the coverage options listed above were not offered but now they are are

Call your agent and ask or give us a call and we can do a price protection review 504.348.3131 or complete our quick form below

how strong is your homeowners insurance company

How strong is your homeowners insurance company?

You need to know if another hurricane is going to hit New Orleans will your insurance company still be in business?

No one really knows the answer to that question but before we review the ratings from Demotech you need to first understand insurance companies buy insurance too

Its called Reinsurance

Most insurance companies can not pay all claims out of their bank account

They purchase insurance just like us and have a deductible

Their deductible is the responsibility to pay all claims up to a limit

The limit could be 1,000,000

Once the losses exceed their deductible (1,000,000) they make a claim with their reinsurance company and the reinsurance company pays the remaining claims

The Louisiana Department of Insurance will review an application for a new homeowners insurance company and they have a reinsurance requirement so they monitor the financial stability of the insurance companies that are admitted to write new policies in Louisiana

Admitted Insurance Companies

You want to make sure you are with an admitted insurance company in Louisiana because all admitted insurance companies are protected up to 500,000 per house from LIGA Louisiana Insurance Guaranty Association

They protect you from insolvency of an admitted insurance company

A surplus lines insurance company will offer no protection from insolvency (out of business)


How can you check to see the financial stability of your homeowners insurance company?

You can use Demotech, a financial stability rating agency of insurance companies

Demotech will rate regional and specialty insurance companies

Here are the 2019 Demotech chart of net admitted assets from 14 insurance companies writing new homeowners insurance policies in New Orleans

If you have a New Orleans homeowners insurance policy this is a good indication of the financial size of your insurance company

Please note some of the companies just started writing in New Orleans so they may not have the amount of net admitted assets of some of the others but does not indicate in any way they are not a good choice for homeowners insurance


insurance company

net admitted assets

$1,036,045,180

SOUTHERN FIDELITY INS CO

$206,051,403

CAPITOL PREFERRED INS CO

$193,168,882

LIGHTHOUSE 

$139,908,866

SAFEPOINT

$130,223,322

CENTAURI

$107,571,734

MAISON

$115,220,213

GULFSTREAM

$101,763,073

ALLIED TRUST

$75,829,361

BANKERS SPECIALTY

$51,835,945

ACCESS HOME INS

$38.226.865

UPC insurance company is top of the list for the end of 2019 in net admitted assets

They are the 18th ranked insurance company writing homeowners insurance in the United States.  

to learn more about UPC click here

REQUEST A HOME INSURANCE QUOTE BELOW FROM

FM AGENCY GROUP

The ratings of the companies listed above are A rated Exceptional from Demotech and each year they are reaffirmed

The website to do your own research is here DEMOTECH 

FM Agency Group

Helping Louisiana with insurance since 2001. Homeowners, car, rental property, flood and personal umbrella. Get the protection you need for the value you want. 504.348.3131

Agent Tim

To read more articles like this one get the insurance advice you need to make the decision to protect what you have in the event of a financially devastating event.  View more articles here

How to determine the insured value on a homeowners insurance policy

If you own a home in New Orleans not many homeowners know how much insurance they need on their homeowners insurance policy

There really are four different values to use on your policy and three of them are wrong

There is

  • Market Value
  • Loan Value
  • Appraisal Value
  • Replacement Cost

Market Value is the value of your home including land value and it is usually the listing price if you were to put your home on the market

This value will fluctuate with the current interest rate and recent home sales in your neighborhood

Loan Value is the amount you owe on your mortgage

Mortgage companies and banks don’t understand the insured value

They only want the coverage for the amount of the loan and don’t understand you can’t insure land because… well after a fire, hurricane or tornado…the land is still there

Appraisal value is completed by an appraiser to determine market value of properties just like yours

All three of these values should not be used to determine the insured value limit on your New Orleans homeowners insurance policy

The correct value is called Replacement Cost or Insured Value

The Replacement Cost is the amount for you to hire a contractor to rebuild your home minus the value of the land

It is usually determined by a cost per square foot figure

Some brick homes could be replaced for $125 – $150 price per square foot

If you have a 2500 square foot home and a contractor says new home construction costs are $140/sq ft your 2500 square foot home would cost $350,000 to rebuild

 

Some Common questions we get about the insured value on a New Orleans homeowners insurance policy limit

 

1. Why do I have to insure my house for that much? My home is worth much less.

 

It has nothing to do with the value of your home in the current real estate market

You can find a 1100 square foot home in the Irish Channel of New Orleans sell for $350,000 and you can find the same 1100 square foot home in another neighborhood in Kenner La 70065 sell for $150,000

The insured value is based off the Replacement Cost (cost to hire a contractor minus land value)

 

2. I only owe 75,000 on my mortgage. Can I just write a policy for 75,000?

 

No.  The replacement cost of your home has nothing to do with your loan balance. 

It is the cost to rebuild your home based on the total square feet of your house

And you can’t under insure a house because of the co-insurance penalty.

If you have a 3000 square foot two story home and you only want to write a policy for 150,000 it could be determined that you are under-insuring the home at 50%

300,000 replacement cost and you only want 150,000

that is 50% of the replacement cost so if there is a claim you would be penalized 50% deduction off the claim check

example) House burns down and you want a check for 150,000 but since you under-insured the property by 50% the insurance company would deduct 50% off of 150,000 and give you a check for $75,000

You would not be able to rebuild a 3000 square foot home for $75,000

If you would like a professional review of your insured value on your New Orleans homeowners policy to make sure you are not under-insured or over-insured you can give me a call Tim D’Angelo at 504.348.3131 or complete our quick for below