Most folks purchase Homeowner’s insurance because they were simply told it was a good idea to have it or because they were forced to purchase it by their mortgage company for the duration of their loan. Honestly, most people purchase a policy without reading through the fine print (or even the large print) and basically just assume the insurance company will pay in the event of a catastrophic loss. The reality is that insurance policies do NOT cover every possible loss scenario; there are exclusions on the policy that must be considered. Some of the more common exclusions are earth movement (earthquakes) and rising waters (flood). Such events can cause major economic loss and policyholders seeking coverage for those types of losses are encouraged to discuss their options with their insurance agent.
Dwelling and Personal Property Coverages:
WHAT IT COVERS: A standard policy will pay for damages to your home and personal possessions in the event of storms, fire, theft or vandalism. Water damage can be covered but the rule of thumb is that if it is a result of water rising from below, there is no coverage; but if water is falling from above, coverage may be aviailable. Additionally, if any of these events cause the home to become unlivable, your policy will cover the cost for temporary housing and food expenses pursuant to your usual lifestyle.
WHAT IT DOESN’T COVER: A standard policy excludes coverage for losses resulting directly from earth movement, power failure, war, nuclear hazard, government action, faulty zoning, bad repair or workmanship, defective maintenance and flooding.
ENDORSEMENTS: There are endorsements available that can be added to your policy that provide coverage for pennies on the dollar such as:
- Foundation Coverage (TX only): Provides protection in the event of a waterline break under your foundation that causes the foundation to sink. This coverage offers limits of up to $20,000 depending on the terms of the applicable policy.
- Water Backup and Sump Endorsement: Covers losses from sewer line breaks that cause water to back up through the toilet, sink or bathtub. This type of loss is normally excluded from coverage on a standard homeowners policy, but can be added back on with the purchased of this endorsement.
- Personal Injury Eendorsement: Protects against all of the following: false arrest; detention or imprisonment; libel; slander; defamation or product disparagement; malicious prosecution (which may include abuse of process); wrongful eviction; wrongful entry or violation of right of private occupancy; and invasion of or violation of right of privacy. This endorsement also offers additional liability coverage in the event you are sued for any of the above-mentioned (alleged) occurences.
BURDEN OF PROOF: What most people don’t know is that the burden of proof is on the insured when it comes to claims for loss of their personal property, especially large-ticket items. For example, if the insured purchases a 90” 3-D television, it is very important that they get and retain proof of that purchase. The easiest method is to simply take photos of your belongings and forward them to your insurance agent to keep on file. Another option is to maintain an Excel spreadsheet containing identifying information on your covered possessions (such as serial numbers on electronics) that can then be provided to the claim adjuster at the time of loss.
Most insurance policies provide liability coverage limits ranging from $100,000 to $500,000. Liabiilty coverage protects you against financial loss in the event you are sued and found legally responsible for another party’s bodily injury or property damage. For instance, if someone trips and falls while on your premises, your policy will pay for their medical expenses.
DOGS AND EXOTIC PETS: Most insurance companies want to know the type of animal and/or dog breed a policyholder owns / has in the home and will usually exclude Pit Bulls, Bull Terriers, Staffordshire Terriers, Akitas, Mastiffs, Chows or any Wolf Hybrids due to the tendencies these breeds have to bite people. Some carriers might actually decline to offer coverage altogether if you have one of these breeds while some others will accept them on the condition that a temperament test is conducted on each animal with satisfactory results. While it may seem unfair that all dogs of certain breeds are lumped into the same “bad dog” category, history has proven that these types of dogs are usually territorial and will often bite in their effort to protect a certain person or persons.
In summary, always talk to your insurance agent about these issues and never hesitate to talk with them about any questions or concerns you have. The last thing you want is to learn about coverage gaps by way of a denied claim! And disclosing all pertinent information to your agent is impertive in order to avoid possible misrepresentation issues, too.