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Homeowners Insurance Frequently Asked Questions

Q: Why did my agent tell me one price for my insurance, but the company is charging me more?

A: If an agent tells you one price, but your bill is for a higher premium, it could be that a simple mistake was made in processing your application. Check to see if the amounts of insurance, deductible, scheduled items, and policy endorsements are the same on the policy and the quote. If you can't find a discrepancy, check with your agent or company to find out if the bill is correct. If the bill is higher than you expected, ask for an explanation. You will probably find there is an honest misunderstanding between you and your agent. These misunderstandings or "misquotes" can happen when the agent does not have accurate information about your property or about what kind of coverage you want.

Q: What is the difference between the "replacement cost" and the "actual cash value" of my property?

A: Replacement-cost coverage pays to replace your home and belongings with materials of "like kind and quality" at current prices. Actual cash-value policies reimburse the depreciated value. A replacement-cost policy will usually cost a little more. Some companies no longer offer replacement cost coverage.

Q: Why didn't the insurance company pay the appraised value of my loss?

A: The appraised value of your property is the value when the appraisal was made. Your property may have lost value since your last appraisal as a result of poor maintenance or depreciation.

If your house or belongings are damaged, your insurance company must pay your property's actual cash value at the time of the loss or its replacement value if your policy provides replacement cost coverage.

Q: Why didn't my policy pay for damage caused by a flood?

A: Flood damage is not covered by most homeowner policies. A separate policy can be purchased through the National Flood Insurance Program insurance company, call NFIP, (888) 724-6924, or check NFIP's Web site:

Q: Why didn't my policy pay for seepage, dry rot, and vermin?

A: Generally, insurance policies exclude damage caused by seepage, dry rot, or vermin (animal pests). This is because these problems are usually the result of poor maintenance, not a "sudden and accidental" event.

Q: Why didn't my insurance pay to replace everything I lost?

A: Most homeowner policies have "dollar limits" on certain types of belongings. Generally, these limits are on silverware, guns, jewelry, watches, furs, and computers. The limits usually cover losses of the average person. Talk to your agent or insurance company about increasing these limits to meet your individual needs.

Q: Why did the insurance company not renew my policy?

A: Insurance companies may cancel your policy if your property has deteriorated to a point that it no longer meets the company's underwriting standards. Insurance companies may also choose not to renew your policy if you have filed more claims than the average person. The average homeowner files a claim once every nine years.

Q: Why didn't I get a notice that my insurance policy was canceled?

A: Your company must send you notice at least 10 days in advance of your policy being canceled because you haven't paid your premium.

The required notice may be in the form of a late billing notice. If your policy has been "non-renewed" (the company is not continuing to cover you for a reason other than non-payment), the company must give you at least 30 days' notice that your coverage is ending.

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This document was last revised on July 31, 2003 .