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coinsurance is part of almost all homeowners, and renters insurance. But if you do not understand this part of the insurance contract, it can cost thousands of dollars in time.

In a homeowner policy, it is usually not a chapter, entitled "Co-insurance." "But the clause in Section I, the conditions of the standard homeowners HO-3 form. It is also in the loss conditions is part of a business insurance.

Go find your policy and the terms section, and read the section labeled "loss settlement. "" I thought about creating a copy of the section in the book to make it easy for you. But the reason why I wrote this book to shake you and you will receive in your own right. You will be paid to hundreds or thousands of dollars more because of the substance in the book, and you're not to me, all of them. So, you busy and your policy.

Let me at least translate the legal language: The insurance must give you the political boundaries of the apartment in the amount of not less than 80% of the full replacement value of the building (without foundations or underground pipes, wires or drains). If you are not the 80% of the full replacement cost, the insurance will be fine, if you are entitled.

Easy. But dangerous to your cash flow.

If you have a house that has a replacement cost of $ 100,000, and the policy for the dwelling is $ 100,000 ... no penalty! Please be assured the value of 100%. You really should be insured 100% to the value of time.

Please remember that the insured that does not mean that you insure your house or building for the market or selling price. Insure the dwelling or building for the amount of money it will be for the reconstruction of the dwelling or building entirely. Do not include the costs for the country of your apartment or the building is. Insurance does not insure dirt.

In this example, you can be as low as $ 80,000, and you will receive 100% of the claims without penalty. But you would still technically underinsured. In the case of a big loss, you would not be everything you collect, so you're back.

Insure your property for anything less than the share in your policy, and it could be a coinsurance penalty.

There is a simple formula to figure Coinsurance:

What you have done, divided by buying what you should have bought.

DID x loss minus deductible = claim amount
IS

One small example:

The value of the property $ 150,000
80% coinsurance percentage
The limit of insurance U.S. $ 100,000
The deductible amount is $ 250
The amount of the loss is $ 20,000

Step 1: $ 150,000 x 80% = $ 120,000 (the minimum amount of insurance for your co-insurance requirement)
Step 2: $ 100,000 (what you have done), divided by $ 120,000 (would) = .67, or 67%
Step 3: $ 20,000 x 67% = $ 13,400
Step 4: $ 13,400 - $ 250 = $ 13,150

You see? It is really quite easy to find out.

Sometimes there is an obligation for co-insurance portion of the content of care, too. The same rule applies and the same method to find out whether a penalty applies.

The big problem is that most people do not find that there is a problem, they have co-insurance after a loss of some art

There are a few obvious reasons for that property under-insured:

1. If you filled out your insurance application, a number that is too small for the replacement cost of your house. This could consist of:

A. Ignorance meaning ... You do not really know how much it would cost to replace your home.

Just as with the same political boundaries on your new policy, as you have on your old policy.

C. was too cheap, and buying a policy with lower limits to save premium dollars.

2. Your agent does not know what it would cost to replace your house if it meets the request.

3. The agent was bidding low price for your business, and some parts to the premium down.

About the only thing you can do a coinsurance penalty in question is.

If your adjuster tells you that you have a coinsurance penalty based on your exposure to him by his calculations of the co-insurance penalty.

The first thing that the adjuster has to do to calculate the co-insurance is the calculation of the valuation of real estate. Everything else he does is based on this calculation. If it is too high, your coinsurance penalty too high.

He is either the calculation of replacement cost valuation (NA), or it is the actual cash valuation (ACV). The policy will tell him, the assessment should be used. It will not be chosen on his own. Most homeowners are NA on the apartment. Most commercial property ACV, although a confirmation of the NA is for a small additional premium.

To calculate the property valuation, the adjuster can:

1. A Wild A ** Guess (often)

2. His estimate of the software. Some estimating software in assessment, so that everything he has to do is to enter data on the age and condition, the size of the building, functions, etc., and that the software will work for him.

3. Marshall and Swift (M & S). The absolute standard in the insurance industry for the construction of evaluation is a company called Marshall and Swift. All adjusters know about M & S, even if they do not know how to use their database. (If you do not know adjuster about M & S, or how to use it to select a different setting FAST.) Even if the adjuster uses M & S, you must create the data, he entered the evaluation. If he is wrong data, the assessment is wrong, too. For example, if the area of your house to 2,000 square meters, and the house is only 1600 square meters, the entire assessment is wrong.

There are a number of variables in an evaluation software, which has a direct impact on your rating. Things like:

Age
Condition
Size
Number of Rooms
Maintenance
Finishes and extras
Basement or slab foundation

SUPER Hot Tip!
You can now use the Marshall and Swift valuation program, like a screw. They have a website where a person can go and to calculate their own real estate valuation. They charge about $ 8 - $ 15 for each assessment. There is a tutorial on the home page of the site that tell you exactly how to use the program. It is super easy and very accurate.

Go to: http://www.swiftestimator.com

Remember, you need to screw, a copy of his calculations for the valuation of your property. Compare it with the Marshall and Swift valuation, to ensure that they are correct. If you are unable to make your own estimation, make the adjustment of the evaluation and show them in a real estate agent. Not only a representative, but a mediator. The broker will probably be able to log in to your property and the assessment, and tell you if they are correct.

If you have calculated a lower valuation than the adjuster, to insist that he is your valuation for the co-insurance calculations.

If you read my book before you qualify, call your agent and make sure that you are insured to assess.

If you read my book, after you qualify, call your agent and ask him why you are not insured to assess. If your agent of the nose, and you can prove it, you could have grounds for a claim against the errors and omissions liability on your agent.

If you read this book to find out how every dollar in order to collect, then ...

FIGHT FOR EVERY point! Each percentage point of a coinsurance penalty worth hundreds or thousands of dollars. Do not allow yourself betrayed by all the money you have the right to collect.

Copyright 2008 by Russell D. Long Core

P.S. I wrote a book that you need!

Check out: http://www.insurance-claim-secrets.com

NUMBER ONE at Amazon.com in its category!

My blog is at: http://insurance-claim-secrets.blogspot.com

Nominated for Georgia Author of the Year Award 2008

Finalist, USA Book News Best Book Awards 2008 ""