Purchasing the Right Policy

            When purchasing an insurance policy, it is easy to rely on the agent selling the policy to choose a policy that fits your needs. However, there are a few things that you, the insured, should watch for when choosing a policy to protect yourself in the event of a future loss.

Check Policy Information

            First, you need to make sure that all policy information is correct. If your name is spelled incorrectly on the policy, or if the policy lists the wrong address, you could face serious trouble when it comes time to file a claim. Under Georgia law, it is the insured’s responsibility to ensure the information on the policy is correct. If the information is incorrect, your insurance company may have grounds to deny your claim.

Ensure Adequate Coverage

            Second, make sure you have adequate coverage for your loss. All too often we speak with policyholders who have suffered a loss, but the coverage in their policy is capped, and they do not receive enough funds to restore their home or business. Three of the common coverage limits we see are (1) mold remediation; (2) actual cash value (“ACV”) instead of replacement cost value (“RCV”); and (3) ordinance and law coverage.

It is important to make sure you have adequate coverage for mold and ordinance and law, as well as having a policy which will pay the replacement cost rather than the actual cost. Dealing with mold is expensive, and mold problems grow quickly; without an adequate mold coverage limit, you could be stuck paying for a costly problem. An ACV policy will limit the amount you can receive in insurance proceeds by applying depreciation to the replacement cost of your damaged property. An RCV policy, unlike its ACV counterpart, should fully compensate you for the cost to replace what was lost. The final coverage you want to make sure your policy includes is “ordinance and law” coverage. Ordinance and law coverage will cover for the cost to bring your property back into compliance with local building codes after a loss. Without it, your insurance carrier will, at most, only cover the cost to restore the property to its previous condition, which may be in violation of current building codes.

Check Endorsements and Provisions

            Finally, be aware of any endorsements to your policy, and make sure the policy you buy is not a co-insurance policy. Endorsements will change your policy and supersede any other language within your policy. Some of those changes can be quite significant. We have even seen an endorsement that only provided coverage for the policyholder’s roof if the roof was less than one year old. Obviously, most people don’t have one-year-old roofs, and that endorsement would have barred recovery had there been a loss to the roof system. Read all policy endorsements carefully to make sure you are protected.

Co-insurance is another sneaky way that insurance companies limit their liability by shifting the burden to the policyholder. Make sure you look out for endorsements or co-insurance provisions, or you could be stuck with the whole bill for your loss.

            Still have Questions? Call the Property Insurance Attorneys at Huggins Law Firm!

            If you have a property insurance claim that your insurance carrier underpaid or denied outright, we may be able to help! The expert attorneys at Huggins Law Firm know that every claim is unique and requires personal, hands-on attention. Contact Georgia’s top Property Insurance attorneys by calling us at (770) 913-6229 or by clicking here.

Written by Foster Peebles, Attorney at Huggins Law Firm