Don’t wait until you need to file a claim to educate yourself on the ins and outs of homeowners insurance. By then, you could be in for an unpleasant surprise.
While homeowners insurance covers many of the major risks, such as damage from fire, it doesn’t cover everything. There are some losses that homeowners insurance will not cover at all, and some that it will only partially cover. Check this list for gaps in your coverage or circumstances where you can expect to pay more for proper coverage.
Flooding. Standard homeowners insurance doesn’t cover flooding caused by storms. However, separate flood insurance is available through the federal government and can be purchased through your insurance agent. Flooding caused by a burst pipe or a water heater is typically covered if it is “sudden and accidental,”unless the insurance company determines that regular maintenance by the homeowner was neglected. Backed up sewer lines are often not covered. Slow drips by pipes, ice makers and toilets that damage walls and floors are typically considered neglect and are not covered.
Mold. Insurance policies vary widely regarding the discovery of mold growing inside a home. Some policies don’t cover it at all, some will cover it with limitations. You may have to add special coverage to your regular policy. Discuss this with your insurance agent.
Termites. Termites cause millions of dollars in damage each year to homes nationwide. Regular inspections and treatment are considered part of home maintenance. It is not covered by insurance. It’s important to maintain an annual contract with a reputable pest control company. Booster treatments may be needed every 10 years for termite prevention. Pest control warranties are important for resale and can be transferred to a new owner.
Natural disasters. Homeowners insurance typically covers natural disasters, but in areas prone to them the premiums will be higher. For example, if you live along the Gulf of Mexico, expect higher premiums for being in a hurricane prone area. The same applies to earthquake prone California. Water damage from a leaky roof that has gotten old and hasn’t been maintained will not be covered. Water damage from a storm ripping the roof off will be covered because it is sudden and accidental. In places like Florida where sinkholes are a common problem, extra coverage may be needed.
Dogs. Check with your insurance company before choosing a family dog. Certain breeds are considered too risky and you may not be covered if the dog were to bite someone. Or you may have to pay extra for coverage. The average dog bite claim is in the tens of thousands of dollars.
Trampolines. Although trampolines provide lots of family fun, many insurance companies will not cover the liability for them because of the large number of accidents involving trampolines each year. Once again, check with an insurance agent.
The most important thing you can do as a homeowner is to be open and honest with the insurance company when you are buying the policy so that you know what is covered and what is not.