Things You May Not Know About Your Home Insurance

When you pay for home insurance in Orange County, it is important to understand what you are paying for. Most policy holders assume their insurance policy will pay for their home in full and their belongings if they have to file a claim. This is not always the case. When you are obtaining quotes home insurance Orange County, you should know the details of how your insurance company will pay you in the event of a loss. Just because you are paying your insurance premiums does not mean your insurer will pay you the money you deserve. Understand the most overlooked areas of a home insurance policy and make sure you build a comprehensive policy that will help you in your time of need.

Covered Perils
There are three different forms of home insurance in California: HO1, HO3 and HO5. Each of these policies will cover different perils. HO1 policies are the most basic insurance policies on the market. These insurance policies are considered named risk policies. What this means is the policy will only pay for perils that are specifically listed in the policy contract. Most HO1 policies cover fire, theft, and vandalism. HO3 and HO5 home insurance policies are all-risk. What this means is that these policies will pay for any loss except for losses that are specifically excluded in the contract. If you want a comprehensive policy, choose between a HO3 and a HO5.

Rebuilding Your Home
When you are obtaining quotes home insurance Orange County one of the most important things to do is calculate how much it will cost to rebuild your home. The rebuild cost of your home is much different from the value of your home on the market. When you compare policies, it is important to choose a policy that will provide you with additional coverage in the event materials and the cost of labor increase. This buffer is generally given the term extended replacement cost. Extended replacement cost is a buffer you can use if your home is a total loss and you do not have enough to rebuild. Most insurers offer ERC between 10 and 20 percent of your dwelling coverage.

How Will Your Insurer Pay For Your Belongings
Personal property coverage will pay for your belongings if they are damaged in a loss. Insurers will value your belongings in one of two ways: actual cash value or replacement cost. Actual cash value (ACV) valuation will consider the age and condition of your belongings to depreciate their value. Replacement Cost (RC) does not take depreciation into account. Always choose policies with RC valuation if you want to avoid paying out-of-pocket to replace your personal property.

The main purpose of carrying insurance is having protection when you file a claim. When you obtain quotes home insurance Orange County always consider how your policy will pay. Ask the questions most insurance agents will not openly tell you and choose the best policy.