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Good Asks for Goodlad: FAQ’s About Homeowner’s Insurance

Hey, everybody, thank you for clicking on our link. My name is Butch Swank from Goodlad & Swank Insurance, and I wanted to give you a couple of answers to some very common questions that we get. There’s basically two questions we get several times per week, and I think it’s important to share these two to save you a little bit of time.

The first one that we get is “How do you guys figure out the valuation of my house? You came up with 300,000 dollars, but I paid 500,000 dollars for my house. How does that work?” So if your house burns down or gets blown away by a hurricane, we want to make sure that your house is built back just the way it was. So it’s important that you work with your agent and your agent does the math to figure out “Okay, this is what it costs to rebuild this house.”

So the part that confuses people is the land that your house is built on — That’s also worth something. So there’s a difference between a market value for your house and then the replacement cost of your house. So always try to factor that in. And then another thing to think about is when you’re talking to your agent, there’s different kinds of grades of house, so you can have a contractor grade, which is the baseline. You can have some incredibly gorgeous, like 500 dollars per-square-foot house. So if we’re talking on the phone, we’re not sitting there in your house. Tell us what you have. Let’s go through. We don’t need to do the exact nitty gritty, but we do want to have a pretty good understanding and appreciation of what’s inside of your house, what is your house built of so that we get it back the way it was before whatever happened happens.

The second question is when we get a whole lot essentially “how do deductibles work?” In Florida, we have a Hurricane deductible, and then we have AOP, which is short for All Other Peril. So the Hurricane deductible part is the most critical component in terms of costs. You get a 5, 3 or 2% deductible. So if your house, let’s go back to the 300,000 dollar valuation for the house. If you have a 5% deductible, that means that 15,000 dollars out of the 300 is your responsibility. So essentially, the carrier will be getting you a check or paying for the replacement of the cost up to 285,000 dollars. So that’s some skin in the game on your part.

Keep in mind the higher the deductible, the lower your premium so it’s a balancing act between if we’re going to take a gamble that we’re going to pay 15,000 dollars for something catastrophic, a brand new roof, something like that, or if you go down to 2%, you’re only responsible for 6,000 dollars. So the 6,000 dollars person who’s going to pay more per year and the 15,000 dollars person who will pay less per year. So it is literally balancing act. So talk to your agent, figure out what makes sense to you now.

One other thing that I want to share, and it doesn’t get looked over, but it doesn’t get discussed as often, we don’t get enough questions about it, is the liability component to your Homeowners Insurance. There are slips and falls, there’s accidents, stuff happens in your house. So be mindful of the fact that you do need it, it’s going to be a component of your policy, but you want to be aware of what your limits are, what you’re paying for, and just keep that in the back of your mind because people just talk about replacement costs or deductibles. We live in a society that is prone to all kinds of lawsuits and you want to make sure that these liability aspects are covered as well.

So hopefully that’s addressed all questions. If you want to do a deep dive, if you want to review something in particular, we invite you to call our office at 239-674-763 or you can go to our website which is goodladandswank.com. So thank you very much for coming.

Goodlad & Swank