You may have to pay more for homeowner's insurance after the Georgia Supreme court handed down a new ruling that makes insurers pay for repairs and now the diminished value of the property.
Insurance agents say the new ruling is murky and may leave homeowners on the hook for higher insurance rates.
Homeowner Elbert Cude is confused about why he may be paying more for his homeowner's insurance.
"The insurance company is going to give you the money and your house is going to be updated, so I don't understand why they want to issue another check," said Cude.
Let's say you own a home that's ten years old and one day there's a hail storm. Your roof is damaged and a couple of your windows are broken. When your insurance company comes and replaces that broken window or fixes that damaged roof, your home actually gains value. Therefore, there is no property value loss.
In that case, you probably wouldn't get one of those extra "diminishing value" checks, but even insurance agents say the new ruling has gray areas.
"So how do you add diminished value to something that's just been replaced better than what is was," said agent Dale Hodges.
Cude, who's already on a fixed income, says a rate increase would be devastating.
"It's going to hurt because they're just going to take more of my money and that doesn't make any sense at all," said Cude.
He says his already tight budget may get a little tighter.
Insurers say they will handle claims on a case by case basis to determine if a diminished value check will be written.
Copyright 2012 WALB. All rights reserved.
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