Blanchard & Calhoun Real Estate Blog

Please make sure you are aware of the co-insurance clause in your homeowners insurance policy so that your claim is fully paid if you have a large loss.  Co-insurance is designed to make sure the client properly insures his/her home to full value.  For example, if your home is truly a $300,000 replacement cost home and you only feel like buying $150,000 coverage because you are trying to keep premiums  low, then you are going to have a large co-insurance penalty if you file a large claim.  In the example above the person only purchased 50% of the insurance truly needed, therefore the wording of the policy says that the insurance company only has to pay 50% of the limit. So even though you think you will receive the $150,000 limit that you purchased, you will more likely receive about $75,000 instead.  On the flip side of this, if you are insuring your home to the full estimated replacement value, then most insurance companies will not only pay you the total limit of the policy to rebuild your home, but they will grant you an additional 25% above, if needed.  Co-insurance language is standard in each and every homeowners policy, regardless of which company you are with, so please be careful and make sure you are properly insuring your largest asset.  If you are that worried about lowering premiums, find other ways to do it like maybe accepting a higher deductible. For more information or quote, please call Blanchard and Calhoun Insurance Agency, Inc. 706-650-6000 today.