We all have either been through a homeowners claim, know someone who has, or heard the horror stories.
It’s only during these times we find out what is or is NOT covered under the policy. Not the best time to figure that out! As an Insurance Agent, I find most people are pretty in tune with their auto coverage but less than educated about their homeowners. Below are just a couple of topics I find to be common misunderstandings.
First and foremost “water/sewer back up” is NOT covered under your standard Homeowner policy and in some cases not even an option at all. You may be able to add this coverage or have it endorsed onto the policy for an additional cost. It is important to read your policy over and ask questions when you are unsure if something is covered or not. I know those policies are hard to understand but most come with a list of Insurance terms and definitions to help you better understand the “lingo”.
Next is the cost of the dwelling itself. Understand there is a difference between what your house can sell for and what it costs to rebuild it after a loss. Replacement Cost is the amount necessary to repair or replace the dwelling with materials of “like” quality and “like” kind at current prices. Actual Cash Value (ACV) is the current value of the property measured in cash less depreciation by wear and tear, age etc.
Last is covering valuables. Do you have expensive jewelry? A rare coin collection? Fur coats? Do you know how or if these items are covered if lost or stolen? Most Homeowners policies will include a small amount of coverage per category, but they could be excluded all together! Scheduling valuables for a certain amount, usually based on an appraisal, can be a great way to make sure they are covered for what they are actually worth.
These were just a few things I often see that can be confusing for people. I can’t stress enough how important it is to be properly insured. Please know coverages vary from carrier to carrier and state to state so be sure to ask questions when choosing coverage for any product.