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Frequently Asked Questions about Home Insurance.
Q. What does Surplus Lines Carrier mean?
A. Surplus Lines Carriers are not required to be licensed by the state, and are not protected by the State Guarantee Fund. Typically, they can only write insurance if it has been rejected by three different Admitted Carries.
Q. What is an Admitted Carrier?
A. These carriers are licensed by the state and protected by the State Guarantee Fund. Their policyholders are protected from various unethical and illegal practices. Since they contribute financially to the state fund, their policyholders are protected if the carrier becomes insolvent or unable to pay losses that are due to them.
Q. Where can I find out if my insurance carrier is Admitted or Surplus?
A. Your insurance company will be able to answer this for you. TDI Look up
Q. Does my Homeowner's Insurance Policy cover me if there is a flood?
A. No, it's not covered under the Homeowner's Policy. However, there is a policy that covers flood and is very inexpensive if your home is not located in a high risk flood area.
Q. What is the difference between an RCV policy and an ACV policy
A. An RCV policy is a REPLACEMENT cost policy and an ACV policy is an ACTUAL CASH VALUE policy. An RCV policy pays what it cost to replace the item or structure vs an ACV pays replacement cost minus its deprecation value (usually 20%-30%)
Ex. For example you have a 30 year roof and it has been damaged by wind and hail. The roof need to be replaced you submit a claim to the insurance company and it gets approved. Your home deductible is 3,000.00 for wind and hail and your roof is 15 years old. The estimate to replace your roof comes out to be 8,000.
On an ACV or Actual Cash Value you will get paid 8,000 the cost of replacement of roof minus deprecation of 4,000 minus the deductible of 3,000. the reason it is deprecation at 4,000 is that the roof is 15 years old of 30 years of its life. 15/30= 1/2 so the Replacement of 8,000 divided by half =4,000
The Insurance company will cut you a check of 1,000 on ACV Policy
On an RCV or Replacement cost Policy they will pay 8,000 minus the deductible of 3,000
The insurance company will cut you a check of 5,000 on RCV Policy
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