On the eve of celebrating our Nation’s independence, I am reminded of perhaps the greatest line ever written in the history of America:
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights…
At the risk of making the most important document in the history of the USA analogous to a piece of paper issued to every customer of a random financial company, your insurance policy endows you with certain rights as well, but not every insurance policy is created equal. A few quick notes (but not nearly everything you should know):
Homeowners and Dwelling insurance are not the same. Neither are the ways you get paid out if you have a loss.
Homeowner’s insurance is a broad policy that covers both property, contents, and liability. It can be considered an “all-in one policy by the owner who occupies a property. There are different types of homeowner’s policies. Some cover your property for ACV “actual cash (deprecated) value, while others cover it for RC “replacement cost.” My guess is, if your refrigerator goes out after a storm, you’d rather replace your 10 year old refrigerator with one that gets delivered from Lowes, rather than one you had to pick up yourself from Goodwill (not that there’s anything wrong with that, I love a good value).
Dwelling insurance, often called “seasonal or secondary home insurance” or “investment property insurance,” covers only the building. It can be expanded to cover some contents and expanded perils, but these things don’t come standard. Once again, be aware of the terms “ACV” and “RC”
Due to the current state of insurance in our state, dwelling insurance on owner-occupied property may be your only option. Homeowners might have trouble getting homeowners policies for a variety of reasons, such as location, poor condition or renovation of the property, and a history of past claims. Homeowners can often get dwelling insurance more easily, and in some areas of the state, there are no carriers currently writing homeowner’s policies, or they are writing homeowners properties that exclude wind and hail damage.
This brings us to our last point: Louisiana Citizens Property Insurance was intended to be the “insurer of last resort.” Due to the deterioration of the insurance market here, it has become the “insurer of only resort” in a great deal of the state. It is important to note, however, that Louisiana Citizens will write policies on all perils that can damage structure. They can also write coverage for “wind and hail only” while a standard carrier may insure for all other losses.
Hopefully this article cleared up a few things for you. If you still have questions please call us at 225-389-6024. Like a good injury attorney, we want you to be aware of your rights as a policyholder.