Your home insurance policy is weak - FM Agency Group

5 Home insurance endorsements you need but probably don’t have


There is a way to Hurricane proof your home insurance policy in South Louisiana

A standard home insurance policy is not enough here

You need to add some inexpensive coverage options to get your policy ready for Hurricane season 

We often recommend these 5 home insurance policy enhancements to our customers

Here are the 5 enhancements your policy probably does not have 

Service Line Endorsement ($30)

This replaces any piping or wiring the provides electrical power, heating, natural gas and waste disposal 

Why this is important?

It is the coverage that is added to pay for the replacement of piping

A standard policy excludes the replacement of the piping due to corrosion and tree root intrusion

Coverage that would have been excluded is now covered for Wear and Tear, Rust or Corrosion, Collapse, Tree root intrusion and Freeze

ex)  the sewer pipe running under your slab collapses due to age and wear and tear (standard exclusion)

Your policy would pay for the resulting damage the collapsed pipe caused but replacement for the pipe is out of your pocket

With this endorsement you get paid to replace the sewer line pipe under your house

Coverage includes $10,000 for damage and subject to a $500 deductible

 

Refrigerated Property ($10)

Loss of power to your property that is out of your control

ex) a car hits a telephone pole up the street and you lose power (normal Power Failure exclusion)

You will get $500 of covered property in your freezers or refrigerators on the residence premises (your house)

Also mechanical failure is also covered (normal exclusion)

Deductible of $100 applies

This coverage is great during a Hurricane Evacuation and when you return home all your contents in your freezer and refrigerator are spoiled

 

Hurricane Evacuation Reimbursement ($50)

Little know fact is when you evacuate for a hurricane and you return home and there is no damage

you don’t get loss of use or reimbursement 

You must have damage to your home for loss of use to kick in

This endorsement will provide $1000 to $1500 of reimbursement due to a mandatory evacuation

Damage to your home is not required to get reimbursed

 

Equipment Breakdown ($30)

This removes the Artificially Generated Electrical or Power Failure current exclusion

Lightning is covered under a home insurance policy but off premises power failure is not

If you can’t prove lightning destroyed your a/c unit or electronics you will not get coverage unless you have the Equipment Breakdown endorsement

The mechanical or electronic breakdown of equipment is covered here

Pro Tip:  Wear and Tear of your a/c unit or appliances is not covered under a home insurance policy or under this endorsement

 

Why I like this coverage?

You buy the coverage to give you the greatest chance of a claim check being issued to you

The home insurance policy is over 100 pages and most of it is what is not covered

When you have the opportunity to buy some coverage back for about 8 cents a day….I recommend you buy it

 

Extended Replacement Cost ($180)

This provides an additional 25% of replacement cost to your policy

ex) your home is protected for 200,000 and with this endorsement the insurance company will pay an additional $50,000 (25%) if the cost to rebuild your home is over 200,000

Just about everyone except a residential home builder has no idea what it costs to rebuild a home

This number fluctuates and has nothing to do the value of the home or current real estate values

This is the cost of hiring a contractor to buy building materials and hire labor to rebuild

 

Why this coverage is important?

Following a major claim event such as a tornado or hurricane the cost of building materials will go up

So if you believe your current home is valued at $130/sq ft to rebuild

following a hurricane the cost could skyrocket to $145/sq ft

ex) Before the hurricane you could have rebuilt your 2200 sq ft home at $130/sq ft for $286,000

but after a hurricane that almost wiped out your home the quote from the contractor to rebuild is $319,000

The 25% extra on the insured value of 286,000 will allow you an extra $71,000 to rebuild your home so you will not have to pay any money out of your own bank account to rebuild and the cost to get the extra coverage on your policy is 49 cents a day

 

What can you do?

You are able to pick and choose which of the above home insurance policy enhancements you want or you can build a better home insurance policy by buying all of them

If you want to review your current home insurance policy

book a quick call with me and we can review rate and coverage

Talk to you soon

Tim D'Angelo