Home Owners Policies

Grand Prairie insurance lawyers and those in Dallas, Fort Worth, Arlington, Garland, Mesquite, Richardson, and other places in the metroplex area need to know what they are looking for in an insurance policy that a client brings to them.
Here are some lines taken from an article that was found recently that discussed deductibles and coverages in homeowners policies. This was after a hail storm that had occurred in the Dallas / Fort Worth area.

The second came when our family confronted a major change to our USAA homeowner’s policy: Instead of a deductible of $500 or $1,000, it now comes with a deductible of 2% of the insured value of our home for wind and hail damage–which means insurance will cover only about half the cost to replace our roof.
The first shock came when the innocent-looking grape-sized hail tap-dancing across my roof last month suddenly turned to shingle-shredding stones that were bigger than golf balls.
Other policies in our area, it turns out, might require deductibles of up to 5% of the insured value for hail or wind damage, or $12,500 on a $250,000 home. That amount will go up as the cost to replace homes climbs.
Such percentage-based deductibles long have been used for earthquake coverage in California and property coverage in hurricane-prone coastal areas. But they are spreading well beyond that, one of the reasons your homeowner’s insurance now probably covers less while costing more.
Overall, both auto and homeowner’s deductibles have been climbing in recent years. While auto deductibles are now often $500 to $1,000, homeowners have moved toward $1,000 to $2,500 a claim from the $250 or $500 that once was common.
State Farm, the nation’s largest home insurer, says such dollar deductibles are the standard in Northeastern states. But it changed its deductibles across the board in Texas last year to 1% to 5% of the home’s insured value, or a minimum of $1,000.
“We’re going to see that around the country within a few years,” says Robert Hunter, director of insurance at the Consumer Federation of America.
Coverage, too, has been changing. In a report earlier this year, Mr. Hunter found that insurers have been pushing some of their risk to consumers by capping how much they will pay to replace a home, for example, or refusing to pay extra to account for higher material costs or to meet modern construction codes.
In Texas, homeowners pay the highest premiums in the country. Consumer advocate Texas Watch found that newer policies adopted in the last decade provide less coverage than before for plumbing leaks, backed-up drains or damage to foundations. (Generally, flooding is covered only through a federal insurance program.)
All of this puts the burden on homeowners to monitor their policies so they will be covered in a catastrophe without facing a financial setback.
Here are some steps to help:
Play “what if.” You should review your policy at least every three years, making sure you have enough coverage to cover costs in today’s market. Insurers and consumer groups recommend you play “what if” with your agent so you understand exactly what is covered: What if a tree comes down on my roof? What if a pipe breaks? What if I can’t stay in the house?
Consumer advocates emphasize that you should ask these questions before you buy a policy. Once you sign up, some insurers might actually count your inquiries about a potential problem as a claim–even if you never actually file a claim or collect a penny.
Make your claims wisely. One large claim will affect you less than multiple small ones. Of course, you buy insurance to be covered, so you are always free to file a claim. But you should know that insurers keep close track of claims and will penalize you for making too many, even if you just happen to hit a string of bad luck.
Two losses in three years that aren’t related to weather will result in higher rates or even a decision to not renew your policy, says Paul Quinn, special assistant to the chief claims officer at Farmers Insurance Group. “A homeowner’s policy is not a maintenance policy,” he says. Insurers expect homeowners to take care of roofs and pipes rather than waiting for things to go wrong.
By contrast, claims for catastrophic events like fires and tornadoes are less likely to hurt you. While insurers may consider past experiences when setting rates, they are supposed to focus on the likelihood of future risks. So the estimated $1.2 billion in home and auto claims from my area’s recent hailstorm, in theory, shouldn’t immediately result in bigger premiums.

What is relevant to insurance attorneys here is that when a person comes in complaining about a claim they made and explaining that the insurance company (1) denied the claim or (2) only paid part of the claim, the attorney needs to read the policy and see what is covered and the extent of the coverage. One has to also bear in mind and be knowledgeable of wording in a policy that is illegal or improper for the circumstances of the claim.
Of course, that is why an experienced Insurance Law Attorney needs to be reviewing these situations.

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