Homeowners insurance: Some things it does and doesn’t cover
Buying a house is a huge investment. Homeowners insurance will protect your home and your investment.
Most homeowners insurance policies protect your property against loss from theft, liability and most common disasters. It is commonly known as hazard insurance.
There are six types of home insurance coverage:
1. Coverage A — Dwelling: Protects against damage to your home due to natural disaster such as hurricane, hail, lightning, or fire.
2. Coverage B — Other Structures: Coverage for other structures on your property such as detached garages.
3. Coverage C — Personal Property: Protects personal items and household contents from theft or destruction.
4. Coverage D — Loss of Use: Provides living expenses if you are unable to live in your home due to a covered claim.
5. Coverage E — Personal Liability Protection: Protects you if there is a lawsuit for bodily injury or property damage.
6. Coverage F — Medical Payments: Covers medical expenses for injury to someone on your property. Only when there is no lawsuit.
Standard homeowners insurance policies do not cover everything. There are a few things not typically covered by homeowners insurance such as:
• Flood damage
• Basic wear and tear
• Valuable personal property such as fine jewelry and art
If you are purchasing a home in a high-risk area for floods or earthquakes, you may be required to add a policy for such a disaster. This would be in addition to your homeowners insurance.
However, just because you do not live in a high-risk area, you may not want to assume you’ll never experience a flood or earthquake. For example, whether it’s a severe rainstorm or a flash flood following a hurricane, this could cause extreme damage to your home and you may not be covered. Make sure you know what is and isn’t covered on your policy.
When you’re looking for homeowners insurance, it’s important to research and make sure the policy is tailored to your home and your assets within the home.
KEITH: So some of the things that homeowner’s insurance would cover you for is fire, lightning, windstorm, hail, vehicle, in case a vehicle comes and crashes – you see in the news where they’ll come into your yard, somebody comes through the house – pipes breaking, theft, vandalism, malicious mischief.
KEITH: And then there’s the liability component to it and that’s in the event that anybody slips and falls, maybe somebody gets hurt in your pool, you have a dog that bites somebody.
KEITH: So some things that your homeowner’s insurance may not cover, depending upon the endorsements that you might take under your policy, are: flood, flood is the big one; earthquake, that’s typically if you live out on the West Coast; vermin, vermin is a big one where maybe squirrels get into the attic, do some damage, insects, so you have termite damage, wear and tear; mechanical breakdown. So these are some of the things that may not be covered that you want to speak to your agent about. Maybe you can add those on under a separate endorsement.
KEITH: One of the biggest things that goes overlooked is your jewelry or your fine arts and a lot of people, after the loss occurs – maybe it was that pipe break and it’s coming down the walls and you had some Renoirs on the wall and people say I have the coverage, right, it’s covered under my contents coverage or my personal property insurance? And that’s not always the case.
KEITH: So make sure you do your insurance research when you’re selecting an insurance carrier, an agent. There is many, many coverages that you need and some agencies don’t provide and/or some insurance companies don’t provide. And I always like to say just because you have insurance, doesn’t mean you’re properly insured.