By Cristofer Montel on behalf of Brightway, The Aloisi Agency
In a risk-bearing world, insurance has become essential. For Home, Life, Automobile and beyond, taking steps to prepare for what could go wrong allows you to have peace-of-mind. Because there is no single way to eliminate risk completely, a homeowner pays a small fee in exchange for protection in the event of a sudden accident or loss. Car accident? Insurance will help pay for the damage. Was your home damaged during a severe storm? Insurance is there to help pay for the damage.
Although many of us are familiar with basic insurance coverage, misconceptions are common. We’re here to de-bunk and explain common misconceptions that homeowners have.
Flood loss from hurricanes isn’t covered
A homeowner’s insurance plan typically doesn’t include protection for flood loss, especially when it results from a hurricane. Unfortunately, most policyholders find this out the hard way. Personal property coverage is usually limited by the peril, or the specific cause of damage. Perils are either included or excluded from coverage, and hurricanes are normally not included in either category, resulting in lack of coverage.
A Homeowners policy may include some protection from water damage, such as a burst pipe or an overflowed toilet. To be covered under the flood loss category, normally the water must come from outside the home. It’s a good idea to purchase coverage for your property and your contents; it’s up to the homeowner to choose what best suits his/her needs. And, remember that most flood loss coverage doesn’t kick in until 30 days after you purchase it.
TAKE-AWAY: Don’t assume you’re covered when it comes to flooding. If you’re skeptical about the approaching hurricane season, take a quick look at what your coverage includes and what it does not. Adding coverage could be life-saving if you believe severe storms or flooding may affect you.
The market value of my home is the amount of coverage I need
When purchasing a Homeowners policy, many homeowners believe the numerical value of the insurance protection should match directly with the market value of the purchased property. However, this is not always true. Instead, the coverage should reflect how much it would cost to replace the home. The value of the home might be very different than the replacement costs, resulting in over or under insurance on the property. This is especially useful because replacement value is uninhibited by depreciation.
What is included in the replacement cost? Anything that is necessary to restore or replace the home back to its original quality. Size and square footage of the damaged or destroyed home are key factors used to determine replacement value.
TAKE AWAY: Make sure to check out the replacement value of your home as opposed to its market value when buying Homeowners insurance. The replacement value could be significantly higher than the market value, allowing you more freedom to restore your home should it suffer damage.
Brightway, The Aloisi Agency in Parkland, Florida, offers customized Home, Condo, Renters, Auto, Flood, RV, Motorcycle, Boat, Life and Umbrella insurance policies from numerous insurance brands. Visit BrightwayAloisi.com for more information.
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