02/27/2023
Be careful when picking out your home owners insurance. Insurance companies are coming up with more ways each year to save themselves money, and unfortunately this can ending up costing you big if you are not careful. Those with existing insurance may want to look over your policy and make sure that what you really want and need.
I recently ran into a situation where a home and their out buildings were severely damaged by hail. The out buildings had metal roofs on them. These were severely dented to a point where they clearly needed to be removed and replaced. The insurance company had in their policy on this place that any damage done to exterior metal was only cosmetic and therefore was not covered under this policy. To add to that the insurance company did not write this up as a replacement cost policy. Therefore they depreciated the items that they were covering according to what they feel they were aged at. This resulted in the home owner then getting coverage of about 35% of the damage cost, no coverage for the 3 metal roofs and any other metal damaged, and then they had to subtract their deductible from that. So needless to say, the insurance company did not cover hardly any of the damage from a very bad hail storm, thus leaving the home owner with well over $20,000 worth of damage with less than $4000 worth of coverage.
The first thing to do is to always make sure that you have replacement coverage. That means that no matter how much what you have is worth, you are being covered to replace it with comparable materials at today's costs. This of course will still be minus your deductible but at least you will not end up having to pay the majority out of pocket.
Then make sure that your insurance company does not have any exclusions for coverage. Metal damage in a hail storm is not cosmetic, no matter what they try to tell you. If vinyl siding is damaged in a storm the large majority of insurance companies will pay to replace the whole side (even if only one or two pieces on that side are damaged). This is because the colors fade so fast that even after only one year, you can no longer match it with new siding. Make sure that your company is not trying to just replace only the pieces that are damaged. If you are picky you will never be happy with this. I first saw this practice by State Farm around 2008. Prior to this they always replaced the whole side if there was any damage to this side. Then they found a way to save themselves money, of course at a cost to you and your house. I am not sure if they still practice this policy, but I know that some still do.
The best thing to do is to buy your insurance through an independent agent. Someone that is working for you that offers policies through different companies, and then can offer you what you want at the best price they can find. A good agent is key. I recently had insurance on my vehicles that in the last years continued to rise in cost, finally reaching a point where I was forced to search for a better company. The costs had more than tripled in the last 2 years. So I then contacted my independent agent and told him my situation and that I wanted him to find me some new auto coverage. He found me the same coverage at 1/3 the cost of what I was currently paying, through the same company. He changed some small things, found a different way to write up the policy, and got me the same coverage for far less. Like I said it is important to have an independent agent that works for you.
Be careful out there, in a day where every dollar needs to work for you, make sure that your insurance does the same.
