Things Your Homeowner's Policy May Not Cover, And What You Can Do About It
Posted on: 12 January 2016
If you own a home, homeowner's insurance is a must if you want to protect your investment – and more. This insurance does more than protect your home. It also provides protection for your belongings and provides some liability coverage against injuries that occur on your property. It's important that you understand what your home policy doesn't cover, though, so you can get additional coverage as needed.
Certain Natural Disasters
Flooding is the most common disaster that isn't covered by the average homeowner's policy. Instead, you will need to purchase a specific flood coverage policy. Earthquakes and wildfires are other natural disasters that may not be covered by your basic policy. Fortunately, you will only need these coverages if you live in an area that is prone to earthquakes or wildfires.
Concurrent Events
This can be confusing. What it basically means is if your home suffers the same damage from two events occurring at the same time, such as a storm occurring at the same time as a flood, you won't have coverage for any water damage if you don't have flood coverage. It doesn't matter if some of the water damage happened on the second floor because the roof got ripped off of your home, while some occurred in the basement due to flooding. The best way to avoid this is to ensure you have all the extra coverages needed for possible natural damage conditions in your area.
Rebuild Caps
The cost of labor, materials, and supplies can quickly surpass the appraised value of your home. If your entire house burns down, for example, and needs to be rebuilt from scratch, this means that the insurance check for the appraised value may not be enough to rebuild your home to its previous size and quality level. Fortunately, many insurance agents offer an umbrella policy that can cover the gap in appraised value and rebuild cost. This is a good buy if you wouldn't otherwise be able to afford a full rebuild.
Required Upgrades
Occasionally, new codes or laws are put into effect that require you to upgrade your home. For example, you may be legally required to install a new circuit breaker box if an old one is deemed unsafe. Sometimes these upgrades need to be done immediately, while at other times they aren't required unless you plan to sell the house. Either way, your regular homeowner's policy probably won't cover the work. If you are concerned about this happening, you can purchase an ordinance of law umbrella coverage that will cover you in the event you must make an upgrade due to legal reasons. Talk with an insurance agent to learn more.
Share
