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It pays to understand how homeowners insurance works and to educate yourself about options before you buy. We’ve gathered our expertise here.
What’s a Rate Guide and Why Do We Write One?
The cost of homeowners insurance is based on many variables: where you live in Montana, whether you live in town or out-of-town (and have access to an around-the-clock fire department), how your home was constructed, and so on. All homeowners insurance policies sold in Montana must be reviewed by this office before they can be sold to you. We examine the policies to ensure they meet Montana law and do not discriminate against any Montanans. That means we see all plans before they are sold — and analyze them. Plans that don’t pass muster cannot be sold. We couldn’t do that job if we didn’t know the ins and outs of homeowners insurance.
Our rate guide uses that data and expertise to help you compare the prices of all plans sold in Montana — and help you determine if the price you are quoted is fair. Our general homeowners guide is a great reference for Montanans who want help to understand what homeowners insurance will cover and what they can expect from their homeowners policy.
The Top Eleven
Your insurance company will pay for the actual cash value first, but will not pay for replacement cost until the entire repair is complete. The difference between ACV and replacement cost is called “recoverable depreciation.”
If your policy has been “non-renewed” — in other words, the company is not continuing to cover you for a reason other than non-payment — the company must give you a 45-day written notice that your coverage is ending. If you, the consumer, wish to cancel a policy in the middle of your insurance term, we recommend you check with your insurance agent or read your insurance policy about the best way to accomplish this. Some policies contain a provision that consumers cannot cancel their policies mid-term unless the consumer contacts the insurance company in writing. If you simply stop paying your premium in an effort to cancel the policy, you could end up owing the cost of the term.
Keep in mind, your insurance policy is a contract and sometimes there is limited or no coverage at all for certain things. Your contractor may say that you need an entirely new roof and the insurance adjuster says it can be repaired instead of being replaced. The key to what triggers coverage is whether the damage is caused by a covered event or “peril”. Review your policy to make sure what “perils” are covered. Things like hail, wind or fire are covered “perils”. If your contractor tells you need a new roof be sure to clarify why it needs to be replaced. Does it need replacement because of hail or does it need to be replaced because it is a 30-year-old roof with significant “wear and tear? If the reason for replacement is simply because it old and in poor condition (wear and tear) your policy may not provide coverage because “wear and tear” is an exclusion under the policy.
Most homeowner policies provide a limited amount of liability coverage if you care for a friend’s children and are not paid. If you provide daycare in your home for a fee, you must buy more insurance to cover this additional liability.