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Understanding Homeowners Insurance

Your Guide to Understanding Homeowners Insurance in Columbia, Tennessee.

Homeowners insurance can be complex, but understanding the basics will help you choose the right coverage for your needs in Columbia, Tennessee. Here’s a comprehensive guide to help you navigate through the essential aspects of homeowners insurance.

Coverage Forms

  • There are multiple coverage forms to choose from, but the most common one is the HO-3 form or homeowners special form.
  • The homeowners special form is an open peril form, protecting the home and structures from any peril that is not specifically excluded. Personal belongings are protected from 16 named perils.
  • Perils are causes of loss. Examples include fire, wind, hail, falling objects, and more.

Coverage Limits

  • Limits of coverage are indicated by the letters A-E and determine how much is allocated to different items under the insurance policy. Coverages B-D are percentages of Coverage A.

Replacement Cost

  • Under the special homeowners coverage form, the structure is paid for on a replacement cost basis, meaning monies are provided “to rebuild your home or repair damages using materials of similar kind and quality.”

Endorsements

  • Some endorsements, or additional coverages that can be added to your homeowners insurance included scheduled personal property (extra insurance for high value items), water/sewer backup, earthquake, windstorm, flood insurance, identity theft, law/ordinance.
  • If there is a loss, you must provide proof of the loss to the insurance company, protect your home from further damage, take an inventory, cooperate with the insurer, and provide additional evidence as needed.

Premiums and Deductibles

  • Premiums are the amount you pay in exchange for the insurance policy. Deductibles are the preselected amount you pay prior to the policy disbursing funds for damages.

Claims Process

  • When filing a claim, you are required to notify the insurer as soon as possible. The amount and frequency of claims can impact your insurance rate. If you disagree with the insurer about the price determined by the adjuster to be paid out for your claim, you can dispute it. Either party can ask for an appraisal of the damage by a third party.

Cancellation and Nonrenewal

  • Cancellation and nonrenewal are two terms to be aware of in the process of purchasing and renewing insurance.

Factors Affecting Insurance Rates

  • Several factors determine the rate of insurance such as claims filed, the characteristics of the house, its location, and protective devices. Additionally, the current market impacts the rate of insurance. Coastal areas or other disaster-prone areas are seeing increases in their insurance rates due to the increased number of losses.

By understanding these key components, you can make informed decisions about your homeowners insurance in Columbia, Tennessee. Ensure you review your policy regularly and update your coverage as needed to keep your home protected.

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