Things You Should Know About Your Insurance Coverage
Natural disasters can be unexpected and devastating to vacation rental properties. It’s crucial to understand what exactly your insurance plan covers so that when an unforeseen, unfortunate event occurs, you’ll feel more prepared to deal with the aftermath.
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5 Things To Know About Your Insurance Coverage
1. Coverage Limits and Deductibles
In Alabama, the standard homeowner’s policy varies in coverage. It’s essential to make sure your home is adequately covered, and your limit will take care of any potential catastrophic loss.
Along the Alabama Gulf Coast, policies typically have two deductibles. Wind/hail/hurricane coverage has its own deductible and is usually based on a percentage of dwelling coverage (1% to 5%). The all other peril (AOP) deductible is usually a set figure ($1000 to $10000).
2. Replacement Cost
The replacement cost is the amount of money it would take to rebuild your home as of today’s construction cost. Do not confuse this figure with the market value or sales price. Since these two values often contain depreciation and/or land value, they can vary significantly from the replacement cost of your dwelling.
3. Age of Your Home
A home built that follows the most recent codes will receive the best insurance rate. The age of a home’s roof, plumbing, electrical, and HVAC will all play a factor in the insurance rate you will receive. Remember, newer is always better.
4. Wind Mitigation
Wind and hail coverage can make up to 70% of your premium dollar—that’s a lot! Adding features to your home that help withstand or increase resistance to high winds caused by natural disasters can help you combat this, especially in our coastal market. For example, a full hip roof will receive a better rate than a gable or complex roof, and brick/concrete board exteriors will rate better than wood and vinyl exteriors. Window protection, such as hurricane shutters and hurricane-proof glass, will help lower rates as well.
5. Every Customer Is Different
Even if you were to have the exact same property in the exact same location as someone, your insurance would be different. Your insurance rates can vary based on credit history, claims history, and more. Plus, ownership of trampolines, swimming pools with diving boards or slides, and certain dog breeds can negatively affect insurance rates.
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