With the 2023 Atlantic Hurricane Season beginning June 1, Insurance Commissioner Jim Donelon is reminding residents to review and assess their roof insurance coverage now and not to wait until a storm develops in the Gulf of Mexico.
“For most of us, our home is the largest single investment we will ever make,” Commissioner Donelon said. “It is vital to be prepared and protected now, not after a disaster strikes. I encourage residents to include a review of their insurance coverage as part of their hurricane preparations.”
The Louisiana Department of Insurance recommends policyholders review their policy to see what deductibles they have and how much they would be responsible to cover out of pocket in the event of a total loss. There is a difference in how a claim will be paid if a policy covers your home or personal property for its actual cash value (ACV) or replacement cost (RC). Actual cash value is the value of your home or personal property considering its age and wear and tear, while replacement cost is the cost to rebuild your home or repair damages using materials of a like kind and quality.
Contact your agent or check your homeowners policy to see if it provides replacement cost coverage. If it does not specify replacement cost, your policy likely only covers actual cash value. Under an ACV or RC policy, your coverage pays for damage to the structure and will pay only up to the policy limit.
Even if you bought an RC policy, there may be other limits on what the policy will pay for damage to roofs and other surfaces. In some cases, the policy may pay ACV on your roof and RC on the rest of your home and property.
Policyholders with questions about their coverage should contact their insurance agent. For more information, contact the LDI at 1-800-259-5300 or visit www.ldi.la.gov.