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How Home Insurance Works Let’s take a look at some examples of how home insurance can work.

The home is covered by $300,000 in dwelling coverage in each instance, with a $1,000 deductible.

A 10-year-old roof is damaged by hail worth $5,000. Because of the rooftop’s mileage, the safety net provider evaluates the rooftop’s worth at $3,000.

The provider pays out $2,000 to settle the claim after deducting the $1,000 deductible.

The kitchen and living room of a home are damaged by fire, costing $25,000. The policyholder receives $24,000 after the claim is approved by the carrier.

A Gulf Coast home suffers $10,000 in structural damage from a flood. Since the homeowner does not have flood insurance, they will have to pay for everything on their own.

Before adjusting the dwelling’s coverage, the house burns down after the homeowner adds a new family room.

The new addition’s construction will cost $350,000, but the insurance company will pay $299,000 based on the dwelling limit and deductible of the policy.

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