Last Updated on September 29, 2020 by Andrew Lee
As an Arkansas resident, know that your homeowner-related expenses don’t end after the initial home buying payment you make. You still need to make payments to your mortgage lender and because most of these institutions require their clients to carry homeowners insurance, you also have to allot a monthly budget for your premiums.
Don’t treat your Arkansas homeowners insurance policy as just another expense. Rather, you should consider it as a critical investment, since it’ll help cover costs if your house sustains damages or you experience property loss under certain conditions.
Average premiums for homeowners and renters insurance in Arkansas
In a recent National Association of Insurance Commissioners (NAIC) study, it listed that the average homeowners insurance premium in the United States, as of 2013, is $1,096.
Homeowners paid an average of $1,183 sitting the state on the 14th place of NAIC’s list comparing premiums from the highest to the lowest
Renters, on the other hand, had a median expenditure of $212 putting the state in 9th place
The finance specialist ValuePenguin further provided insight on AK’s monthly homeowners insurance payments. The assessment revealed that this amounts to $88.32.
As opposed to the national average, this particular state’s annual insurance premium average is nearly 1.1% higher.
Coverage categories in the event of a loss
Homeowners insurance policies typically provide four different coverage types. Classified as Coverage A (structural losses), B (other forms of structural losses, such as outbuildings, etc.), C (contents), and D (loss of use of the home/Additional Living Expenses). Insurance companies in Arizona also offer other forms of coverage, such as liability and medical payments insurance.
The Additional Living Expense portion of your homeowners insurance policy provides you with a great amount of financial assistance. You’ll find this very helpful in the event that something happens to your home and you can’t live in it for a short period of time. It’ll help cover the costs associated with temporary rent, gas, mileage, and even food.
Key Facts and Market Trends in Arkansas: The NAIC also released the results of another study that reviewed the major facts and market trends in the State of Arkansas. As of the year 2015, it has 56 domestic insurance companies. The total count of both domestic and licensed foreign insurers is at 1,545.
Waiting period for insurance company settlements in Arkansas
Arguably one of the biggest concerns of homeowners insurance policyholders is the length of time they have to wait before their insurer settles a claim they filed. In accordance with the information given by the United Policyholders, repairing, rebuilding, or replacing typically takes about 18 to 24 months. However, this still depends on the damage. The more severe and extensive it is, the longer it’ll take.
Arkansas state rules on cash value, replacement cost, and depreciation
There are several extremely important homeowners insurance terms you have to know the basics of. First off is Actual Cash Value, or ACV, which pertains to the difference between the Depreciation Value and the Replacement Cost of a damaged or lost property. Because insurance companies also have to make profits, you can’t expect them to spend the same (or higher) amount of money for repairs or replacements. To determine ACV, they factor in the age and the condition of the property at the time of the damage or loss.
Next is the replacement cost. As the term already implies, this refers to the amount of money needed for replacements. Insurers can provide their clients with either the same unit or something of similar type and quality.
You want your home to remain protected at all times, as you never know when inclement weather can hit it or unforeseen events can damage it. Maintaining an Arkansas homeowners insurance policy will provide you with peace of mind knowing that your house and its contents are in good hands.