Ummm... sorry Bob, not exactly.
Sometimes a little information can be dangerous. Note, I am a licensed Fire
and Casualty Independent Agent in California. The following applies to
California but the carriers pretty much standardize their policies and
concepts throughout the country.
*See your agent for your specific circumstance and know your policy
provisions!*
*
*
Ok, maybe I can illuminate a bit:
* Assuming a total loss like a catastrophic fire - if your home is insured
for $400k and you have a total loss, y*ou get $400k, less any applicable
deductible*. Often in a fire the deductible is waived.You may be required to
re-build to avail yourself of the full $400k. You can always negotiate a
"walk away" settlement with your carrier.
* Earthquake policies are a separate rider. They are insanely expensive (in
Calif. at least) and deductibles can run anywhere from 10-20% of the face
value of the policy and are usually a very bad deal.
* In the case of an *uncovered* earthquake event, many HO policies do not
cover the home or contents lost.
You are on your own! If the house burns down as a result of the earthquake -
your fire coverage kicks in and all's well.
* If after a catastrophic loss, you decide to re-build the home, you get the
face value of the policy (which is usually a pre-determined or negotiated
amount and always specified in the policy summary, *not the appraised value
or depreciated value*) and sometimes more (sometimes up to 100%) to cover
code upgrades, etc. This is spelled out in your policy summary and these
coverages vary widely by carrier, policy and State.
* Assuming a total loss - If you lose all possessions in the home, and they
are not covered by specific riders (like art, jewelery, musical
instruments), you get whatever "contents" coverage was specified in your
policy - less any deductibles. This is usually a variable percentage of the
face value and is specified in the policy summary. *However*.... for
contents reimbursement, you "*may*" be required by your insurance company to
re-purchase the items to receive their *full retail value* (very few people
replace everything lost, thus they come up short on insurance
reimbursement). Otherwise, you may be reimbursed for only the *depreciated
value* of the items. You always want full retail-value replacement coverage.
Hope this helps..
Best,
Randy
'66 BJ8, '68 E-type OTS
On Tue, Mar 15, 2011 at 10:00 AM, Bob Johnson <bjsbj8 at gmail.com> wrote:
> ...and many people don't know that their homes (and contents) are
> insured using actual cash values. The house that you bought 30 years
> ago for 100,000 has "depreciated" to 50,000. It's market value is now
> 400,000. It burns, you get 50,000. Yikes!
>
> Bob Johnson
> BJ8
>
>
>
--
*We don't live large, but we do try to live well....*
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