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It is All About the Insurance


It is All About the Insurance

We are three weeks out from the tornados that struck Dallas on October 20, and I can unequivocally tell you to drop what you are doing and read your home insurance policy right now. My family has moved from hotel to hotel and then to an Airbnb. At the end of the month, we will be settling in to our temporary/permanent apartment. The “good” news? All of this has been covered by insurance so far, and we will be reimbursed. The not so pleasant news? There is a long road ahead fighting with insurance over the value of our home in order to rebuild as well as what the contents claim will be. This will be the case for many of many of my neighbors as well who are with companies other than Chubb who has prevailed as the most painless in this process. Moral of this story? Switch to Chubb! I know we will be doing so as soon as we have the opportunity to do so.

So, you might ask, where exactly are we in this process? We decided, to the dismay of our insurance company, to hire a public adjuster to help us navigate the unfamiliar waters of weathering this storm. We did this because we really did not understand the process, and to be honest, there are days when we still don’t. What we have learned is that it will likely be months until we are able to settle on a value and wait to be reimbursed. During this time, we will be eating away at the number in our policy known as “Cover D-Loss of Use.” My advice to you is to look at this number in your specific policy and make sure that it is enough for you and your family to live, move, and exist with for years.

And then we have the “Coverage A-Dwelling” section of your policy. This is the amount that the insurance company MAY help pay for the rebuilding or repair of the physical structure of your home if it is damaged by a COVERED hazard. The key words being “may” and “covered.” I would advise you to check and make sure that this number will indeed replace your current home. To do this, take the square footage your home and multiply it by construction costs. You can get these numbers by asking a local homebuilder or giving me a call if you need some help. Do this every couple of years to be safe!

You may also have an “Extended Replacement Cost”, but you will only receive that if your home is deemed a “Total Loss”. For those that have seen the pictures of our home, you may or may not be surprised to learn that while we considered it a total loss, the adjuster does not.

The “Coverage C” section of the policy refers to the “Contents Replacement Costs.” This is where the policy gets tricky and no one, not even Chubb, typically pays out the entire amount. To decide if this section of your policy is existing in your favor, ask yourself, “If I lost everything, how much would it take to get back on my feet?”

And finally, there is the “Coverage D” area of a policy which is crucial. Known as the “Additional Living Expenses Coverage” or ALE, it acts as a super emergency fund. I cannot imagine what would have happened had we not had this. A tornado has destroyed our home and we have no idea how long it will take to rebuild it. A year? But that is only started after we have agreed with everything with the insurance company so maybe 18 months to two years? The keyword is ADDED Cost of Living. We have to rent an apartment, rent furniture, plates, silverware—everything. For example: our kitchen has been destroyed so our monthly food bill has gone from $500 to $900. The additional $400 will be covered by ALE.

Feeling comfortable with the plan you currently have for your home? Not sure what your plan says? Somewhere in between? This is my plea as a realtor and a friend to please go and take a look at your homeowners insurance policy and really read it. You simply cannot be underinsured on your biggest investment, and I would not be doing my job if I didn’t take this learning experience to urge you to make sure that you are well taken care of.

Christy BerryNovember 19, 2019