Many people believe that homeowners insurance protects them from every possible loss, but this isn’t always the case. For example, most home insurance policies don’t cover floods or earthquakes, and some have limits on damage to the exterior of your home or theft of valuables inside your home. If you’re in an area where floods or earthquakes are common, you may need to purchase additional coverage or an earthquake rider that extends your existing policy to cover these types of losses.
What Are My Home Insurance Options?
There are two basic kinds of home insurance: comprehensive and liability. Comprehensive coverage is sometimes called full coverage or homeowners’ insurance. Comprehensive policies can provide protection against damage to your property from a number of sources, including fire, wind, theft, vandalism and natural disasters. Liability coverage helps protect you if someone gets hurt on your property or if they sue you because they get hurt while on your property. For example, if a piece of your home furniture falls off a dresser and hits someone in the head as they’re walking through your living room, liability coverage would help pay any medical bills that person may incur as a result of getting hit by falling furniture.
What Does Homeowners Insurance Cover?
Homeowners insurance covers your home and its contents in case of damage or theft, but there are some things it doesn’t cover. For example, it doesn’t cover floods or earthquakes. It also excludes anything you own for personal use—if your house burns down and all your personal belongings inside are destroyed, that’s something you may have to buy insurance for separately. The other thing homeowners insurance won’t cover is any damage that you knowingly cause—if you get drunk one night and decide to break something just because you feel like it, home insurance won’t help with replacing those items.
Where Do I Start Researching Homeowners Insurance?
Because home insurance policies are incredibly complex, it’s a good idea to start your research by consulting with an expert. Asking a company like The Hardesty Group how insurance works is a great way to get your questions answered. Our specialists will sit down with you and go over every detail of what you want coverage for, how much you’re hoping to spend on premiums and other factors that can determine whether or not you’ll be able to get home insurance from one particular company. During your free consultation, we’ll help ensure you’re getting full coverage and that your rates are as affordable as possible. And if there are any areas where we can save money on our policy—such as bundling other types of insurance—we’ll point those out too!
Common Scenarios When Homeowners’ Policies Don’t Cover Damage
Homeowners insurance is designed to protect you from financial loss if your home or belongings are damaged or destroyed. With that said, it may still come as a surprise to learn that a homeowner’s policy won’t cover every expense related to owning a home. While most policies will cover direct physical damage (that is, something you can see and touch) caused by common events like fires and floods, they don’t typically cover indirect damage caused by less common incidents like earthquakes and sinkholes. You also won’t be covered for any damage done while performing acts of God, so you won’t have coverage in cases of extreme weather—even if those weather events are damaging your property.
Uninsured and Underinsured Homeowners Insurance Claims
Homeowners’ insurance covers a broad range of incidents, from fire to vandalism. However, even though your policy will likely cover natural disasters like storms and tornadoes (assuming you’re in an area prone to such weather), there are still some exclusions that could lead to your coverage being denied. Things like poor maintenance and neglect, for example, could keep you from receiving proper payment for any damages sustained as a result of these issues. In addition, policy exclusions can also come into play with regard to flood damage, so be sure you’re aware of your coverage’s limitations before filing a claim. After all, it’s always better to have too much than not enough protection!
Working with Your Agent When Filing a Claim
If you’re like most people, having a home insurance claim denied isn’t an idea you want to entertain. Chances are, that day won’t come—and when it does, you won’t be alone. All insurance companies deny coverage at some point during their relationship with policyholders. But how your agent handles a denied claim will affect whether or not it becomes more than a one-time event. If your agent is doing his job right, he should do more than just look at denials as part of doing business—he should make them into opportunities to grow your relationship and strengthen trust with you and other clients like you.
What Types of Policy Exclusions Will My Homeowners Policy Have?
Homeowner’s insurance policies will have many exclusions built into them. These are usually listed in a section of your policy titled, what is Not Covered or What Is Excluded. Be sure to understand these exclusions before filing a claim, as your home insurance policy may not cover you if the damage was done by something that is excluded under your plan. Typical exclusions include flood damage (if you live in an area prone to floods), damage done by earthquake, war, and nuclear hazards, and damage caused by government-mandated acts. It’s always best to check with your provider first before filing a claim if you think that one of these might apply to you—some insurers may waive certain exclusions under specific circumstances.
When Is the Best Time to Buy My Homeowners Policy?
Homeowners insurance is a great thing to have, but when is really best to buy it? You could end up saving hundreds of dollars per year by making an informed decision. For example, if you wait until your credit score takes a dive or you purchase a new car, you could face higher rates and lower coverage limits. If possible, try purchasing your policy at least six months before any big events (like moving into a new home or graduating from college). It’s also not uncommon for some insurers to offer graduation incentives—lower premiums for several years after graduation if your children are still covered on your policy.
When you buy home insurance, you’re essentially investing in a financial contract. The idea is that if something happens to your home—if it’s burglarized or damaged by a natural disaster—your insurer will step in and cover some of your losses. But there are situations where companies can deny coverage like if they think you don’t have enough security in place or your damage was intentional. If that happens, there are legal ways to appeal their decision. The National Association of Insurance Commissioners has information on what steps to take. You can also use an independent broker who knows state laws and local companies well, so he or she can help fight for you when necessary.