Types of Homeowners Policies
It is not unusual to hear that one’s home insurance cover is inadequate. The most common mistake made by people buying homeowners insurance is not buying enough coverage. It is relatively simple to keep on purchasing the same amount of insurance annually even though the value of your home increases as inflationary trends become more and more evident.
If you do not address this issue it may go out of hand one day and may impact on what you collect from your insurance company if your home is damaged, even if the loss is small.
When deciding how much insurance you need, you must also decide whether you want to purchase an “open perils” or “named peril” policy. Some factors that you need to think of when buying homeowners insurance are mentioned here.
Choosing Your Policy Limits
Determine your policy limits and what it would cost to replace your house.
Itemize your belongings present in your home and other buildings on your property. Go in for an amount of insurance on your dwelling, which is at least equal to 80% of its replacement cost. The 80% replacement cost provision is provided in most homeowners policies in Virginia. This means that you will receive only partial payment for even small losses unless you have coverage at the time of the loss equal to or greater than 80% of the replacement cost of your home.
Deductibles
Most homeowners insurance policies sold in Virginia have a set deductible amount of $250. This means that you agree to pay a sum of $250 on your own to repair damage to your home or its contents before you are authorized to collect the damages from your insurance company on each claim filed. Note that this deductible does not apply to claims under the liability or medical payments cover.
All homeowners policies issued in Virginia require you to do the following when a loss occurs:
- Give immediate written notice of a possible claim to your agent or company. If the loss is by theft, notify the police. If you have lost your check book or credit cards, notify the bank or credit card company.
- Protect your property from further loss or damage. If you make temporary repairs, keep a record of what you spend. This could include things like covering broken windows or shutting off the gas.
- Give your agent or company a list of all damaged, destroyed or stolen property.
- Show the damaged property to your agent or company, if asked.
If you feel that the amount of money offered by your insurance company to pay for a loss is not fair, there are several alternative courses of action that you may consider:
- You can request that the loss be valued by appraisers who do not work for your insurance company;
- You can file a complaint with the Bureau of Insurance; or
- You can hire a lawyer to represent your best interests.
Virginia Property Insurance Association
This association has been set up with a view to providing property insurance cover for fire, lightning, removal, hail, explosion, riots, smoke, vandalism and malicious mischief. No cover is offered for broken glass. A broader property also exists for eligible properties.
This policy provides coverage for several more causes of loss, including glass breakage. Liability insurance and theft coverage may also be purchased as separate endorsements, but only if the property is eligible. Policies are only sold to those who cannot purchase insurance for their homes elsewhere. This program should be a last resort because the premium is generally higher and the coverage is frequently more limited than in policies sold by private companies.
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