Asked and Answered: FAQ’s About Home Insurance

Homeowner insurance policy is a legal contract that binds your insurance company to pay for any losses that you might suffer on your residential property. The policy may also include coverage for your belongings and other items you want to extend it to.

To reap the benefits of your policy, you must familiarize yourself with all the exclusions and coverages of your policy.

In this post, we will answer common questions that homeowners insurance policy owners in Massachusetts may have:

What amount of insurance coverage should I buy for my home?

There is no definitive answer to this. The ‘ideal’ insurance coverage amount varies from one homeowner to another. It also depends on the property and belongings you own.

If your home has a lot of unique décor or has been renovated recently, it will fall under the category of non-standard homes. These features may include expensive, hand-carved woodwork or stained-glass doors. Non-standard homes need to be brought to the insurance agent’s attention because a standard homeowner’s insurance policy won’t take these factors into account. You don’t want to find out at the time of a claim that you’re underinsured.

How does the policy deal with the loss of specific (scheduled) items?

If your policy covers any specific items, the insurance company will replace the item in case of a loss. The insurer will have the liberty to choose a vendor that they’ve been buying from a long time. On the contrary, if you don’t want to get the item replaced, you can ask the insurer to pay you the amount.

In this case, the insurer will pay the same item that they would have spent if they got the item replaced through their own vendor. As far as fine art is concerned, those items are covered according to their scheduled, pre-decided amount.

Home Insurance

How does the insurance company account for the cost of repairs and replacements?

There are different valuation methods that an insurance company uses to replace any lost belongings.

  1. The actual cash value considers the actual replacement cost of the item, minus any allowance for depreciation.
  2. Modified replacement cost is a valuation method used by the insurer to restore your home to a basic and functional condition. This is also known as the functional replacement cost. This method doesn’t involve the restoration of any unique features of your home that provide aesthetic value.
  3. Replacement cost is the total amount needed for repairs and replacement, without accounting for depreciation.

You should ask your insurer about the valuation method that they use, prior to purchasing the policy.

If you’re based in Springfield MA, there is no better group of home insurance Springfield MA than the ones at Western Mass Auto Insurance.

Here are the directions to our Springfield office.

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