The purchase of your home is likely the largest singular investment you will ever make. As such, it demands protection. This means purchasing a homeowners insurance policy to protect your home from a wide range of events and happenings. Before purchasing a policy, consider what homeowners insurance does and doesn’t cover:
What IS Covered
Homeowners usually does protect against the following events and situations, depending on specific plans and coverage amounts:
- Structural Coverage: Homeowners policies typically won’t protect against general wear and tear of your home. However, it will cover structural damage caused by a natural disaster like tornado, hail or fire. This coverage often applies to all attached structures, like decks and garages.
- Non-Attached Structural Coverage: If the damage incurred is a result of a natural disaster, homeowners insurance will usually cover repairs or replacement costs for non-attached structures on your property. This can include sheds, detached garages or fences.
- Personal Property: Most standard homeowners policies include some measure of reimbursement for personal property. It will often reimburse you for any belongings damaged in a disaster. It won’t replace it in its full value, usually just 50% to 70% of the overall value of your belongings. There are often exceptions to what personal property is covered in homeowners policies. For example, jewelry often requires an additional add-on to the policy and isn’t automatically covered under the protection of homeowners. Therefore, you should check what personal property is covered before purchasing a policy. If something important isn’t covered in the basic policy, you can opt to add supplemental insurance for specific possessions.
- Liability Coverage: In this day and age where people tend to be lawsuit happy, this coverage is vital. Liability coverage protects you if someone is hurt on your property and then tries to sue you for medical expenses. Most homeowners policies have a liability aspect that pays for the costs related to someone’s injury.
What IS NOT Covered
- Flood Damage: Although it is a natural disaster, flooding is often not included in covered events. If you live in an area prone to flooding, it’s a good idea to purchase a separate flood policy to cover your home and possessions in the event of a flood.
- Negligence Damage: Homeowners policies typically do not cover damage due to negligence. In general, homeowners insurance is designed to help you recoup your loss if something happens to your home that’s not within your control. However, if damage is caused by your neglect as a homeowner, there is a chance your policy won’t cover the cost of repairs. For example, your insurance company might not pay for damage due to frozen pipes if you as the homeowner didn’t take steps to winterize your pipes.
- Landslides and Earthquakes: This type of natural disaster, much like flooding, is typically left out in terms of what is covered in most homeowners insurance policies. There are some exceptions to this rule. For example, Tennessee and Florida have a “catastrophic ground coverage collapse” clause within policies that covers damage from sinkholes, landslides and earthquakes.
Other Common Uncovered Issues:
- Sewer backups.
- Dog bites (on your property).
- Trampoline accidents.
- Termites.
- Mold.
Keep the above information in mind when purchasing your homeowners insurance policy. If you aren’t sure if a certain event or structure/possession is covered, ask your agent. It’s better to be safe than sorry.