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Coastal Homeowners Insurance FAQs

Replacement Cost or Actual Cash Value Option in a South Carolina

Coastal Homeowners Insurance Policy

  Covered losses under a South Carolina coastal homeowners insurance policy can be paid on either a replacement cost basis or on an actual cash value basis. When "actual cash value" is used, the policy owner is entitled to the depreciated value of the damaged property. Therefore, the older the item is, the less money you may receive for it. If you choose the "replacement cost" coverage, the South Carolina coastal homeowners insurance policy will reimburse the amount it costs to replace the property with something of a similar type and quality at current prices.

All Risks or Named Perils in SC Coastal Homeowners Insurance

An "All Risks" policy provides the broadest South Carolina coastal homeowners insurance protection because it will cover losses that are due to any peril except those specifically excluded in the policy. A "Named Perils" policy covers losses that are due to only those perils listed in the standard South Carolina Coastal Homeowners Insurance policy and typically include fire, hail, windstorm, and other physical losses.

Coinsurance Penalty in SC Coastal Homeowners Insurance

If your policy limit is less than 80% of the replacement cost of your home, you will face a "coinsurance penalty," which means you'll have out-of-pocket expenses to cover costs beyond the policy deductible you chose. For example purposes we will assume your home's estimated replacement value (RCV) is $100,000. The co- insurance clause requires you carry at least $80,000 (80% of your RCV). If you chose to purchase only a $40,000 South Carolina Coastal Homeowners Insurance policy you would be underinsured by half. Therefore, in the example the insurance company would pay one-half of a loss less the policy deductible, so if you suffered a $10,000 covered loss to your house, condominium or townhouse and had a $500 deductible, your policy would only pay $4,500.

Personal Liability in SC Coastal Homeowners Insurance

Personal liability in a South Carolina coastal homeowners insurance policy is also an important part of having security from accidents that may occur on your property. We suggest you choose coverage limits that are not less than those on other liability insurance you own, such as car insurance.    

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