Rising Homeowners Insurance Costs: What You Need to Know

Homeowners insurance has seen a significant price increase in recent years, largely due to a rise in claims filed by policyholders. This blog post aims to shed light on some key aspects of homeowners insurance policies, especially in light of these changes, to help you make informed decisions.

Understanding ACV vs. RCV Policies:

• ACV (Actual Cash Value): This policy depreciates the value of your belongings based on age and lifespan, meaning you may not receive the full cost of replacement after a claim.
• RCV (Replacement Cost Value): This policy covers the full cost of replacing damaged belongings, regardless of depreciation. While typically more expensive, it offers better protection in the long run.

Navigating Rising Deductibles:

• Insurance companies are raising wind and hail deductibles, increasing your out-of-pocket expense in case of such claims.
• While reducing coverage to lower your premium might seem tempting, it can leave you under-insured in case of major incidents.

Beware of Unethical Roofing Practices:

• Oklahoma law prohibits roofing contractors from offering to cover your deductible. Accepting such offers can void your insurance claim and leave you financially responsible for repairs.
• Be wary of contractors who bypass building codes, as their insurance won't cover any resulting damage or injuries.

Understanding Exclusions and Payment Schedules:

• Cosmetic/Metal Exclusions: These clauses exclude coverage for cosmetic damage to metal components, even if it affects their lifespan. Carefully consider these exclusions before accepting them.
• Roof Payment Schedules (RPS): These agreements lower your premium but increase your share of the cost in case of roof damage. Evaluate your financial capacity before opting for RPS.

Don't Underestimate Rebuild Costs:

• Restoration costs are often higher than new construction due to factors like demolition, mitigation, and engineering fees.
• Ensure your rebuild coverage accurately reflects your home's value, considering potential foundation damage and other unforeseen costs.

Remember:

• This blog post is not a substitute for professional advice. Consult with your insurance agent and an insurance restoration contractor to understand your specific policy and coverage options.
• Be an informed consumer and don't hesitate to ask questions and clarify any doubts you may have.

By staying informed and making informed decisions, you can navigate the changing landscape of homeowners insurance and protect your home and belongings effectively.