Before you do your research and get quotes for home insurance, it is important to make sure you have the right homeowner insurance coverage should theft or other disasters occur. Having the proper amount of coverage ensures you can afford to pay for replacements and repairs if needed.
The AM Best Rating
All insurance companies undergo an AM Best rating process to give individuals access to a scale that shows them the value of the company and their ability to follow through on coverage. This rating system has been in place since the late 1800s. To obtain a rating for an insurance company, AM Best looks at a number of factors, including:
- Business profile
- Financial performance
- Balance sheet
- Management style
Insurance companies receive a rating from AAA (exceptional) down to D (in default). When obtaining quotes for home insurance, make sure you inquire about this rating.
RCV vs. ACV
In most cases, homeowner’s have two choices for their homeowner insurance coverage: replacement cash value or actual cash value. Your choice can have an impact on the cost of your premiums, as well as the money you receive if something happens. Replacement cash value provides the funds needed to replace an item that was stolen or damaged. However, actual cash value will pay only the depreciated value of the item. In some situations, you may not receive enough compensation to replace the item in full.
Foundation Coverage
The foundation of a home dictates the structure’s stability. When this aspect of the home is damaged, it can lead to greater losses, especially if it is not repaired in a timely manner. However, most homeowner insurance policies don’t cover foundation repairs, except in specific circumstances. For this reason, it is necessary for homeowners to ask about adding this coverage to your policy.
Earthquake Coverage
Many homeowner’s insurance policies don’t include earthquake coverage, particularly if individuals don’t live in an area where these events are common. Because this homeowner insurance coverage isn’t typically included in quotes for home insurance, it is important to talk to your agent about adding this endorsement to your policy. This additional coverage pays for structural damage that can occur as a result of an earthquake. Before you buy any insurance policy, it is important to get reliable quotes for home insurance to help you make the right decision. Homeowner insurance coverage varies widely, depending on the company you choose and the specifics of the policy. However, there are certain components of your plan you should understand before purchasing. If you don’t choose the right amount of coverage to protect your home from disaster, you could face financial difficulties in the event of an emergency. If you are interested in obtaining quotes for home insurance, contact us at Steven Graves Insurance. Our insurance agents are ready to help you make the smart choices to ensure proper coverage for your home.