Homeowners insurance is supposed to provide financial help after damage has occurred to your home. Families who were affected by Hurricane Sandy may soon be battling their insurance companies over deductibles. It basically comes down to what the “fine print” says.
Hopefully, everyone who had their home damaged by Hurricane Sandy also had a good homeowners insurance policy. Homeowners insurance is supposed to help with the financial aspects involved with repairing damage to your home, garage, driveway, yard, and more. It is also supposed to provide funding for you to replace personal property that was inside your home and that was damaged.
Check your policy to see if you will be getting replacement value or actual cash value for your personal property that was damaged. There is a very big difference between the two possibilities!
Replacement value will give you the amount of money that it would cost to replace an item that got damaged with the equivalent item today. The computer you bought a few years ago would be replaced by a new one that is similar to the one that was damaged.
Actual cash value is not as helpful. The insurer will figure out how much your three year old computer is worth today. That’s the amount you will receive. It is highly unlikely that this will be enough for you to replace the damaged computer with a brand new one in this situation.
Your homeowners insurance policy might have a deductible for hurricane damage. If so, then your insurer is going to expect you to pay a certain amount of money out of your own pocket for repairs before they will help you.
According to Insurance Journal, the governors of New Jersey, New York, Connecticut, and Maryland have told insurance companies that they cannot enforce hurricane deductibles on storm-related claims that resulted due to Hurricane Sandy. This is because the National Hurricane Center declared Sandy to be a “post-tropical storm” shortly before it made landfall. This will help save affected homeowners in those states a lot of money.
Your insurance company might try and insist that the damage your home experienced is due to “wind damage”. This is the insurers way of trying to get around their responsibility to pay for claims due to Hurricane Sandy.
Common sense says that the winds were, of course, caused by the tropical storm. A basic understanding of science would make it clear that one cannot separate a storm from the wind involved with it. Sadly, common sense doesn’t always exist for greedy insurance companies.
Image by NASA Goddard Photo and Video on Flickr