In today's time, having home insurance is must for ones who own a house. It is undoubtedly the best way to have a degree of protection for the house and for the things within in it.
Due to this reason, more and more people are inclining towards home insurance plans. With the increased demand of insurance, various companies today are offering beneficial home insurance quotes to people through which, one can compensate the losses caused to their home or to the possessions inside it. Such policies are liable both when any damage is caused to the property, as well as financial losses occur due to storms, fire, and theft.
Commonly we also hear repeatedly: read the fine print before signing. But unfortunately, when it comes to reading an insurance policy, there are some terminologies, which put the policy holder in a state of confusion. So, further in this article I would like to put your glance towards home insurance information that includes some of the most common and confusing clauses encountered while purchasing insurance-
Due to this reason, more and more people are inclining towards home insurance plans. With the increased demand of insurance, various companies today are offering beneficial home insurance quotes to people through which, one can compensate the losses caused to their home or to the possessions inside it. Such policies are liable both when any damage is caused to the property, as well as financial losses occur due to storms, fire, and theft.
Commonly we also hear repeatedly: read the fine print before signing. But unfortunately, when it comes to reading an insurance policy, there are some terminologies, which put the policy holder in a state of confusion. So, further in this article I would like to put your glance towards home insurance information that includes some of the most common and confusing clauses encountered while purchasing insurance-
- "Act of God" Clause: This phrase is commonly used in most policies. It means that any damage caused due to natural disasters like hurricanes, earthquakes or tornadoes, home policies would compensate the owner for it. Besides this even there are some "acts of God”, which cover the claims for wind, hail and lightning. So, before signing any policy make sure to ask the agent whether they cover all these terms in the policy or not .
- Actual Cash Value or Replacement Value: This is the most confusing term, which people likely encounter while purchasing home insurance. The owners need to know whether they would get the actual cost value (ACV) or replacement value of the property destroyed. Under ACV, when an accident occurs the owner would get the cost of property minus the depreciation. And under replacement value the owner would get entire cost of the property, without deducting the depreciation. Therefore, knowledge about these two is crucial .
- Deductibles: It is the amount, which an owner has to pay before the insurance company begins to pay the claim. You can reduce the amount of insurance premium by selecting higher deductible .
- Depreciation: Owner cannot make claims over the property, which is waste or has worn out due to any reason. In such case, ACV policy comes into play, in which claims are paid upon the depreciated value
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