Homeowners insurance: What’s covered, what’s not, and what to look for

Homeowners insurance can be confusing. What coverage do I really need, and what doesn't my policy cover? Luckily, we combed the web to find some of the best articles that will help you understand your coverage and get a better estimate of what you should expect to pay.

What is homeowners insurance?

Your home is one of the most important investments in your life. Protecting it from natural disasters, such as a fire or hurricane, theft and vandalism are just a few reasons why homeowners insurance exists. Your policy protects you from financial losses caused by natural disasters or other events outside your control.

What is not covered?

Homeowners insurance protects you from a wide range of things such as fires, earthquakes and other disasters. However, some common mishaps are not covered by your policy. For example, if you make a dent in your roof (either intentionally or by accident) or take out your neighbor's mail box while hanging up a new one, you will not be covered for that loss.

Over-inflation: Many homeowners policies do not cover damage caused by over-inflation of tires, batteries and other items that can cause small fires.

Double coverage: If you have an umbrella policy or renters insurance in place, it may cancel out some of the insurance provided through homeowners insurance.

Third-party liability: If you have a policy in place to protect others including your employees or tenants, the insurance company may cancel out some types of coverage you have.

General liability: You can't get sued if you aren't at fault. The only way to avoid damages is to purchase enough insurance and pay a small premium for it. Usually, the minimum amount is $100,000.

Insurance fraud: Insurance companies don't want to pay out fraudulent claims for items such as stolen TVs or computer equipment. They will only cover $1 on the dollar in losses from this type of claim.

Disability insurance: If you have a disability insurance policy in place, it may cancel out some of the coverage provided through homeowners insurance. Flooding and earthquakes are generally not covered by these policies, though they may cover other areas such as your basement being flooded during periods of heavy rain.

Flooding and earthquakes: You can't get flood or earthquake insurance to protect your property from these types of disasters. You need to look into another form of protection to be sure your home is safe.

Perils: You need to know what type of perils (hazards) are covered in the event your home is damaged. The National Association of Insurance Commissioners has a list of perils you should be aware of.

Comprehensive: This type of coverage protects your home from damage caused by fire, wind, war, hail, lightning and vandalism. It also provides protection for your car and personal belongings on the property.

Comprehensive policy can include up to $500,000 in damages due to fires.

Clean stolen cars: The insurance company will not cover stolen cars if the owner is at fault or if the car has been abandoned. You will have to pay out-of-pocket to get your vehicle back from the thief at an estimated cost between $15 and $100 per day for being in storage.

If you don't have enough coverage or a theft and vandalism rider, you may have to pay for the stolen items out-of-pocket.

Inflation: Inflation is not covered under a homeowners insurance policy. Depending on what item has been inflated, the owner may be responsible for paying out-of-pocket to replace the item.

Liability: If you are sued in court, your insurance won't pay your legal fees unless you purchased liability coverage or have an umbrella policy in place (which won't cover all fees).

Mold: The EPA cautions against mold infections because they can cause serious health problems and diseases similar to tuberculosis. Mold in your home can also result in toxic mold and lead to respiratory problems, allergies and asthma.

Mold can be difficult to find, but you should still contact a home inspector for assistance. If you have molds or mold allergies, you'll want to get rid of the mold as soon as possible.

Smoke detectors: The insurance company may not cover the cost of replacing smoke detectors if they are not working properly. You will have to pay out-of-pocket for a new smoke detector or replace them at your own cost.

Structural damage: Your insurance policy will cover the cost of repairs or rebuilding of your home to get rid of water damage from floods and storms. However, if your home was damaged by falling trees, you would need a separate structural policy to rebuild your home.

Storms: The company will not pay for you if you experience damaged caused by lightning strikes or hail because homeowners insurance does not cover this type of catastrophic loss.

Vacation insurance: You can have an umbrella policy in place to protect yourself from vacation loss caused by natural disasters such as hurricanes and earthquakes. It will also cover ocean, plane and cruise ship travel delays related to weather.

Connected to cover: Your homeowners insurance policy may not cover certain items you have connected to your home such as a swimming pool, hot tub and water heater. You should also check the list of covered items on your policy to be sure everything listed is covered.

Dangerous wildlife: If you have a pet, it's important to have liability coverage for them. Otherwise, the pet owner can sue you in court and take both pets and money.

War: The company will not pay for damages caused by war or terrorist acts (such as bombing). You will need another type of coverage to protect yourself from these types of losses.

Use this link for more information on homeowners insurance that is specifically related to hurricanes or flooding.

Some homeowners insurance policies offer discounts for certain types of coverage. If you have a claim, you will have to provide proof of your discounts in order to get paid out by your insurance company.

Some of the most common discounts include:

Bundle discount: This covers up to 20% off your premiums when you combine home and auto policies into one package. The discount is available for as long as both policies are active with the same insurance company. You do not have to enroll in autopay to qualify for the discount, just purchase both policies from one company at the same time.

Conclusion

Once you know what type of coverage is offered by your current homeowners insurance policy, you can begin the process of getting either a replacement policy or a new policy from an insurance company. You may have to shop around and comparison shop to find the best rates and cheapest policies for your home and family. Once you find the best rate, don't hesitate to contact us if you need more assistance in finding the right coverage!

Contact our office today at (888) 884-7000 for your personal consultation with our knowledgeable staff.

To see what other types of insurance policies are available for what reasons, check out this Insurance Marketplace link here: https://www.insurancenowreviews.