Guide to Choosing the Best Homeowner’s Insurance - Part 2

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As a homeowner, you want affordable homeowner’s coverage. But you also want the best coverage. It’s important to know and understand everything homeowner’s insurance can, and should, cover.

Beware of Missing Coverages: What Your Policy Could Be Missing

When was the last time you reviewed your homeowner’s insurance policy? Do you know what’s covered? Here are some common things that aren’t included in homeowner’s insurance policies:

1. Floods, Surface Water, Rain Damage

Believe it or not, there are a few natural disasters that are not included in a homeowner’s insurance policy. It’s true that many policies say something must be “sudden and accidental” to be covered, but despite that language, floods and damage as a result of surface water and rain are almost always not a part of your coverage.

If you’re not in a flood zone, why does it matter? According to Flood Smart, more than 20 percent of flood claims come from properties outside of high-risk flood zones. It’s not just those at risk of having several inches or feet of water in their home that should be concerned. Flood Smart also mentions that just one inch of water in your home can cost more than $25,000 in damage. Are you prepared to risk it?

2. Mold Damage

The water nightmare doesn’t end there. With water comes mold. There are plenty of types of mold that are harmless, but some that are harmful to your health — and living with that in your home can be dangerous. The Centers for Disease Control and Prevention connect the presence of mold to the development of asthma and mention that mold can be especially bad for children and those with weakened immune systems.

Whether or not mold is covered under your homeowner’s insurance policy is usually determined by the source of the mold. Is it due to a recent flood? Surface water? Rain damage? If it’s caused by one of these events that are not covered by your policy, mold as a result of that event will probably not be covered either.

3. Sewer or Drain Backups

If your sewer or drain gets clogged or your sump pump fails and everything backs up into your home, the sudden mess of water and sludge is a nightmare. Damage to everything from the floors to your electrical system can be severe and expensive. Unfortunately, this is another disaster that isn’t usually covered under a standard homeowner’s policy.

4. Earth Movement: Earthquakes and Sinkholes

If you happen to know someone from San Francisco, chances are good they could tell you earthquake damage is not covered by a standard homeowner’s policy. But this type of coverage isn’t something that’s only relevant for Californians anymore. Take one look at the United States Seismic Hazard Map and you’ll see the risk for earthquakes spans across the country.

Earthquakes aren’t the only type of earth movement that isn’t covered by a standard homeowner’s insurance. Sinkholes are another one. The only place you’re likely to have coverage for sinkholes is the state of Florida, where this type of insurance coverage is required.

5. Power Outages

If you are without power for an extended period, you can suffer a significant loss — spoiled food in the refrigerator, damage to electronics, burst pipes — and may need to temporarily relocate to a hotel until power is restored. Expenses resulting from power outages may not be covered under your homeowner’s policy.

There are a few questions that often determine whether or not a power outage is covered. Where did the outage originate? Why did it occur? If the outage originated on your property you might be covered, but widespread outages usually are not. If the outage occurred as a result of a flood or earth movement and you aren’t covered for either of those conditions, you probably don’t have coverage. The standard coverage for power outages varies depending on the company and the policy — even more reason to be sure you know your policy inside and out.

6. Car Sound System Theft

Shifting gears from property damage to personal property: As you may know, it is common for homeowner’s policies to include coverage for your personal property — even loss due to theft. However, audio equipment that’s permanently installed in your car is not likely to be covered under your policy. If you have an expensive sound system in your car, you should revisit your auto insurance policy. There are options available to make sure it’s covered under comprehensive coverage.

7. Vacant Properties

Homeowner’s insurance is meant for occupied homes, not vacant ones. If you’re in a situation where you need to move, make sure before selling your home that you know what your policy does and doesn’t cover. In most cases, policies will include exclusions for homes that have been vacant for a certain number of days. The reason? Vacant properties come with a higher risk, so insurance policies for these work differently. Make sure you know your current coverage and how you will need to adjust your policy to cover a vacant property.

8. Jewelry, Artwork, Antiques

As we mentioned, many homeowner’s insurance policies provide coverage for personal property. However, there are limits to how much they will cover. For example, if your diamond goes missing, you may have a jewelry limit of $1,000 on your coverage. If you lose a precious stone from a piece of jewelry, that may not be covered at all. The same often applies to artwork and antiques. A minimum level of coverage may be provided but usually doesn’t come close to what you would need to replace it. Knowing the limits of your personal property coverage, especially if you’re relying on it to cover things like jewelry, artwork and antiques, is important.

Source: gunnmowery

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