Some people make the mistake of assuming that once they get homeowner’s insurance they are good to go and don’t need to worry about what is or is not covered by their policy. They assume it’s the whole home and all of the contents in the home as well as ANYTHING that might happen to the home. However, nothing could be further from the truth. In fact, several things and events are explicitly excluded from most homeowner’s insurance policies. It’s really important for you to be aware of these items and either purchase supplemental insurance and/or a home warranty to offset any exposure you may have. Here is a short list, but we recommend you talk with an insurance agent about your specific situation and any other concerns you might have about your policy:
- Earthquakes – While you can generally purchase separate coverage for earthquakes, if you live in an area along a fault line you can expect that it will be relatively expensive so you should weigh the advantages/disadvantages.
- Floods – This is similar to the situation with earthquakes. If you live in a flood plain you really should consider adding flood insurance as you can be certain your homeowner’s policy will not cover flooding and the damage can be very substantial.
- Hurricanes/Tornado – Like other acts of nature, portions of the damage done by hurricanes and tornados are not covered by most homeowner’s policies. If you live in areas that are impacted by either of these you can look at other insurance products or warranties that might offer you some protection.
- Water damage – Okay now we are talking about something less than a flood or a hurricane (both which cause major water damage). This example is more like a toilet or tub overflowing, a pipe bursting, etc. Most homeowner’s policies will not cover this but many home warranty products will.
- Termites/Rodents/Pests – Speaking from experience, if a rat chews up your electrical wiring (which apparently they like to do), that is not covered by your homeowner’s insurance and may NOT be covered by your home warranty either (you need to check both). The same is true of most damage caused by pests.
- Foundations settling – Over time your foundation can settle and crack causing several possible problems from water in your home/basement to major stability issues for your home. In general, this is expected after some time and is not covered by most homeowner’s insurance carriers.
- Power Surge – Depending on the cause of a power surge you should check your policy to make sure your home and any electronics damaged by the surge are protected. If they are not, then it is very likely that you can get protection under a home warranty.
- Home office equipment – Many people are surprised to find that your home-based business is not fully protected by your homeowner’s insurance policy (yes, you actually still may need regular business insurance depending on your situation).
- Personal liability – If a visitor slips and falls and hurts themself on your property (home), you may or may not have coverage. Usually it is something that you add to your existing policy and/or control the appropriate amount needed for personal liability coverage.
- General wear and tear – Much like with a car and/or any other property you own general wear and tear (usage of the home) is NOT covered by your homeowners insurance. This is again where you should look to a home warranty for protection.
(source:blog.doorfly.com)
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