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Critical aspects of insurance law and homeowner policies

On Behalf of | Aug 27, 2020 | Insurance Law |

Given the current circumstances in Washington State and throughout the United States, people are paying greater attention to insurance issues and how they will be protected in case of emergency. That includes medical coverage, unemployment insurance and homeowner insurance. In the past, people might have pushed these topics to the backburner. Now, it is wise to think about them with increased urgency. Homeowner policies can be critical if there is a natural disaster, a fire or simple damage that accrues over time.

Understanding homeowner insurance

For those with a mortgage, homeowner insurance is required by the lender. Even if the house is already paid for, homeowner insurance is a wise step to be fully protected. The amount needed will hinge on the individual circumstances of the property and the homeowner. That can include the size of the home, its structure, if there were improvements made, and other factors. There is nuance to these policies. For example, the homeowner insurance will not cover other residences on the property like a rental property. It does cover unattached structures.

Cash value and replacement cost differ and this disparity may cause challenges if there is an issue that requires insurance payments. Cash value coverage will pay to replace or repair with the depreciation subtracted. An item that was purchased for $500 but is three years old will likely have depreciated over time. That will impact its cash value. Replacement cost is generally used by homeowners and will pay for repair or replacement. If a person must repair a window that was damaged in a storm, the company pays cash value until it is repaired or replaced. After that, it reimburses the homeowner for any excess.

Legal advice may be needed for insurance disagreements

It is not uncommon for people who believe they are covered by homeowner insurance to find that the insurer is refusing to pay as much as the person thought it would or is denying the claim entirely. There is fine print in insurance policies and people might not be fully cognizant as to what is covered. If the right amount is not paid, the claim is denied or there are unreasonable delays, it is imperative to have legal advice to rectify the matter and get what is owed. A law firm that specializes in insurance law may be able to help.