Insurance FAQ of the Day!

[Brian Sigrest]

Here's your insurance FAQ of the day:

Q: Why is “Coverage A: Dwelling” in my insurance policy more than the market value of my property?

A: Coverage A is not based on the market value of the property, but on the estimated reconstruction cost of the main dwelling structure should it be destroyed by an event covered in your policy (assuming your coverage is for “replacement cost”). Some people get confused about this! As most of you know, the price of construction has gone up in the last year, so make sure your agent is reviewing your policy at renewal to adjust your coverage as needed. You don’t want to find out the hard way that you’ll have to pay thousands of dollars out of pocket even though your insurance company “covers” a loss.