Here’s my Q&A session with home insurance agent Brett Jennings.

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Today Brett Jennings is here from Krisell and Jenning’s Agency to answer some of your frequently asked insurance questions. Let’s dive right into it:

Q: What’s the difference between market value and replacement value?

A: Market value is what you pay for your home; however, in the insurance industry, we’re insuring the replacement value of your home. For example, if you buy a 1,200-square-foot house in downtown Fayetteville for $350,000, we can’t insure the home for that much because it’s not worth that much; the market value includes the land value. Land costs more in certain areas, but we would insure that house for the same amount of money no matter where it is.

Q: What do insurance companies look at when inspecting a house?

A: The No. 1 thing is overall upkeep; they make sure the grass is mowed, the roof is well-maintained, etc. Whether you’re buying or selling, the main thing for you is to ensure that every stairway has handrails, even if it’s just a few steps—this also includes a ledge that’s three feet or higher.

Q: How important is it for a buyer to get a home inspection and review the seller’s property disclosure?

A: We often see something like a seller’s cousin is a handyman, he looks over the home, and says everything looks good to him. However, a licensed home inspector has a massive list of things to check. For example, they can look at a leaky faucet and say there’s prior damage there or be able to tell you that you have about five years left in your roof, and your cousin or uncle handyman may not be able to see these things.

Let’s say six months after buying the house, you have a leak in your roof; we evaluate it and find it has hail damage, however, there hasn’t been a hailstorm in a year and a half. Since there hasn’t been a hailstorm since you bought the property, it isn’t covered by insurance. This is why we recommend you review the disclosures to see if there are any prior claims and have a licensed inspector come out to assess everything to ensure the home is in top shape ahead of time.

Q: Is it important to get an insurance quote before making an offer?

A: Yes, because many different factors go into an insurance quote. It’s crucial to find out whether you can truly afford the house and the insurance. Your debt-to-income ratio is critical when closing on a property, and you don’t want to fall in love with a home, then find out the insurance on it is more than you can afford, and not be able to close. There can also be a large difference in policies depending on the house’s location.

Q: What are some common misconceptions about insurance policies?

A: The biggest misconception is that it covers wear and tear. For example, we get many calls in late spring and early summer saying someone’s air conditioning went out, but unfortunately, if the issue isn’t due to a covered danger or something unexpected happening—like lightning struck it—it’s not covered. If the air conditioner is just old, we won’t cover those repairs or replacements. Again, this goes back to the home inspection; when you buy the property, you need to ensure everything is in working order.

Another huge misconception is that your neighbor’s home’s insurance will cost the same as yours. Again, many factors go into insurance such as your credit, the house’s age, the roof’s age, location, and more—there’s no flat rate.

Q: How long does it take to get an insurance quote?

A: If you let your real estate agent know that you’re in a rush (for example, you need to make an offer quickly), it shouldn’t take more than 15 to 20 minutes. Of course, this depends on how busy the insurance company is, but they can probably get back to you soon.

We hope this answered some of your questions regarding home insurance. If you have any other questions about insurance, give Brett a call. If you have real estate needs or questions, call or email me. We would love to help you.