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What Missouri Homeowners Need to Know Before Suffering a Loss

A windfallen tree that destroyed a shed that portrays home weather damage.

Always expecting the unexpected isn’t a rule most of us want to live by, but knowing what to expect from your homeowners insurance is vital. For that matter, it’s a rule that can keep you from a major disappointment should you suffer a loss due to wild weather patterns that cause damage to your home or other property.

Many Missouri homeowners have first-hand knowledge of how severe weather across their state each year results in devastating losses. And, as is often the case immediately following a powerful storm that causes heavy and widespread damage, labor and rebuilding material prices can rapidly increase in the affected areas.

Prices can actually skyrocket as materials needed to repair and rebuild homes become scarcer and in short supply. Since many homeowners insurance companies have turned to using a property damage estimating software program called Xactimate, it’s not at all unusual for the prices available to your insurer to be outdated. Sudden storms, tornados, and torrential rains can catch insurance companies by surprise, leaving them to refer to prices that are far too low to prepare an accurate repair estimate and reflect the actual cost of those repairs.

Not that you should do your homeowners insurance company’s work for them, but you should check with your insurer if you know for a fact they use Xactimate or a similar program to assure they’ve updated their prices after the storm.

Most homeowners probably haven’t reviewed the bulk of their policies since they purchased their homes or the policy itself – unless they frequently experience losses. The truth is – standard homeowner policies claim that you’re entitled to the full replacement cost for the repairs to your home. But, when it comes to making the repairs to your home, your insurer is only required to pay you the actual cash value, until you replace or repair your property, after which you are eligible to collect the difference between the amount of the replacement cost and the actual cash value.

Insurers refer to this as the “hold back”, which is the amount owed to you, the homeowner, by subtracting depreciation from the replacement cost estimate for your repairs.

Factors used to determine the depreciation can include age, wear and tear, as well as whether the item being repaired or replaced is obsolete or no longer available.

When encountering large losses – amounts over $10,000 – it’s typically a good idea to get a separate estimate from a local general contractor and comparing it to the amount provided by your insurer to complete the repairs. Should there be major discrepancies between the two estimates, set up a meeting at your house for the insurer’s representative and contractor to discuss the differences.

Finally, if you find yourself in the middle of a dispute between the contractor and your insurance company covering the cost of repairs, you may want to take advantage of the appraisal provision in your policy. The appraisal provision is available strictly to resolve disputes over the amount of a loss when parties disagree.

If you choose to proceed with the appraisal clause, you can select a qualified appraiser that you pay for, while your insurer selects their own appraiser, which they pay for. The two appraisers then select a neutral and impartial umpire, for whom you and your insurance company share the tab.

Ideally, the appraisal panel will side with you in determining the amount of the loss the insurer must pay you. But, keep in mind the appraiser selection process can be tricky and consulting an experienced attorney who can assist you could be well worth it.

Don’t wait until you suffer a loss to review your homeowners policy. Give it a peek so you can have the peace of mind of knowing your home and its contents are properly insured. Making sure you’re getting the best homeowners insurance rates available only takes a few minutes. Why not get a free homeowners insurance quote today?

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