Last Updated on September 29, 2020 by Andrew Lee
When you become a home owner, you shouldn’t think that your expenditures end after making the payment for the home. This is especially true when you used a mortgage lender to finance its purchase. Aside from your mortgage payments, you also have to think about your homeowners insurance policy.
Investing in an Alaska homeowners insurance policy will provide you with protection in the event you suffer from a loss, whether structural, content, or use. In a nutshell, it provides you with peace of mind knowing you will receive financial aid to help pay for the expenses associated with these losses.
Average premiums for homeowners and renters insurance in Alaska
In February 2016, the National Association of Insurance Commissioners (NAIC) conducted a study on the average nationwide homeowners insurance premium. The nationwide average in 2013 is at $1,096.
Homeowners paid an average of $980 putting it at the 25th place of state rankings
Renters, on the other hand, had a median expenditure of $168 putting the state in 28th place
Finance expert ValuePenguin also conducted it owns study which listed Alaska’s monthly home insurance premium at an average of $79.31
Comparing AK’s yearly premium average, it is .89% lower than the national average.
Coverage categories in the event of a loss
Most homeowners insurance policies in Alaska comprise of four different classifications. These include Coverage A (for structural losses), Coverage B (for other types of structural losses such as those affecting outbuildings and garages), Coverage C (contents), and Coverage D (loss of use of the house or Additional Living Expenses). There are several other types that this type of insurance policy can have, including medical payments and liability coverage.
Another part of your homeowners insurance policy is the Additional Living Expense coverage of homeowners insurance in Alaska. This is quite impressive, as it helps pay numerous aspects of your daily life in the event your insured home is rendered temporarily non-usable. It reimburses you for temporary rental expenditures, food, as well as gas and mileage under certain conditions.
Key Facts and Market Trends in Alaska: The NAIC conducted another survey assessing the key facts and market trends in the country. According to the organization, as of the year 2015, there are 13 domestic insurance companies in the State of Alaska. The total number of both domestic and licensed foreign insurers, on the other hand, is 763.
Waiting period for insurance company settlements in Alaska
A question that many homeowners in AK ask is how long it takes before their insurer will provide them with the settlement for a claim they filed. As United Policyholders cited, this depends on several conditions, the biggest contributor of which is the extent and severity of the damage. In most cases though, the time frame associated with repairing, rebuilding, or replacing is anywhere between 18 to 24 months.
Alaska state rules on cash value, replacement cost and depreciation
In the State of Alaska, a term commonly heard in the homeowners insurance industry is “Actual Cash Value” (ACV). This is obtained through deducting the Depreciation Value from the Replacement Cost. The former takes into consideration the current age and the condition of a lost good. Note though that ACVs can vary slightly depending on how your policy defines it.
Replacement cost, as the term implies, is the total expense of replacing items with something new – either exactly the same item or an alternative that has the same type and quality.
Homeowners insurance is an extremely important part of your life as a property owner, since it provides you with a financial barrier for out-of-pocket expenses in the event of losses caused by numerous factors, such as environmentally-caused property damage.