If your house burned down or was badly damaged in a storm, you might not get the insurance coverage for which you think you’ve paid.
Brenda Tenison wasn’t taking any chances when she and her family moved into their new Mentor home about a year ago. She called John Bollman, from State Farm’s Bollman Insurance Agency, and asked for advice.
“You really have to research and know what you’re getting and spend the time doing it, because if not, you may get burned later on," Tenison said.
Bollman told Call for Action Reporter Lorrie Taylor homeowners policies aren’t what they used to be. For instance, just because a consumer buys replacement coverage for the contents of their house, doesn’t mean they’ll get a check for the full amount after making a claim.
“A company might say, 'Well, you have to replace everything in six months or we’re going to pay you the depreciated cost,' ” Bollman said.
The Mentor insurance agent said asking if there are any limits or restrictions on how coverage will apply at the time of a claim should prevent a consumer from getting a nasty surprise later.
“On homeowners policies, they do read differently now, and so, yes, you have to have some expertise in knowing what you get,” he told Taylor.
Most policies include a clause for “Loss Of Use,” which is the insurance industry’s term for when a client has been forced out of their home.
“Let’s say it was destroyed by a wind storm or fire, and you’re going to be in a hotel for a while, most companies in northeast Ohio would write for two years coverage because sometimes you’re not even back in your house in one year,” Bollman said.
He said that’s not the case anymore. He said some companies have cut their coverage back to a year, which means the customer would be forced to pay for lodging on top of the mortgage payment they’re already paying. And that’s not the only nasty surprise that can turn up in the fine print.
“There are other things, like, is there a restriction on how many tools you can claim, are there restrictions on cameras, are there restrictions on firearms, that type of thing,” he said.
Bollman recommended homeowners read their policies to ensure they’re getting what they think they’ve paid for; advice that could save people like Tenison a fortune when they can least afford to lose it.