Not everyone has a long, hard-fought struggle to gain ownership of a home. A few are lucky enough to inherit one, or possibly win big in something like a lottery. Some individuals or families are also just so high in their income levels that buying a home wasn’t a big deal. However, for many, it is a huge deal. It meant years of saving a down payment and watching your credit rating like a hawk, followed by seemingly endless house hunting, offers, negotiations, and then finally moving in.
Now that you’re here, you want to take care of it the best you can, because it takes care of you, your family, and your possessions. You get protection from the elements, physical comforts, and place to rest and refresh when not out and about in the world. It’s also a source of financial stability and security too, as you have a lot of wealth locked up into it. For all these reasons, you rely on your homeowner’s insurance policy to help you keep all that covered. However, do you have a standard or basic policy? It might not cover as much as you think.
A typical homeowner’s insurance policy is also commonly called an HO-3. It’ll usually cover your home for numerous dangers, but a number of crucial exclusions do exist that you need to be mindful of. When you know just what is and isn’t covered, you can save yourself a lot of money and spare yourself much headache down the road.
Water And Earthquake Damage
Sinkholes, earthquakes, and other forms of earth movements aren’t covered by standard policies. You can buy earthquake insurance as an addendum or endorsement for an extra fee in 49 states. California is an exception. Flood insurance is something that also includes mudflow. It has to be bought separately as its own policy. It’s only available through the National Flood Insurance Program, which the government runs.
There are also exclusions for other kinds of water damage. Your standard policy is not likely to cover damage from backups or overflows from a sump pump, drain, or sewer system. This is again something optional coverage is available through the addition of a separate endorsement.
Taking appropriate care of your home means you don’t have to wind up paying for the expensive repairs that won’t be covered by your homeowner’s insurance.
A lot of things that a standard policy aren’t going to cover usually wind up happening from neglect and/or failure to adequately maintain a property. General wear and tear aren’t covered, nor are rust, mold, or rot. Also excluded are damage from birds, rodents, insects, and termites. Other exclusions include damage as a result of smoke or smog from agricultural and/or industrial operations.
When something is just made poorly or winds up having a hidden defect, that situation falls underneath the inherent vice exclusion, and as such, it not covered. The same goes for all mechanical breakdowns.
Also, if your home winds up suffering a power outage, then a standard policy isn’t going to cover things like your food getting spoiled.
Personal Injury Liability
Personal injury liability is something designed to protect you as a policy owner from any lawsuits that might result from a nonphysical injury, such as defamation of character or also slander. This is not included in most standard policies, but you might be able to buy them separately.
While you might not want to contemplate the possibility of this happening on American soil, damage resulting from nuclear hazards or warfare isn’t covered by Home Insurance in Knoxville TN.
You’re also not covered for any expenses that you incur due to a case of identity theft. However, this coverage is available as an endorsement.
When you own a watercraft, you might have as much as a thousand dollars in coverage for it being stolen from your home. However, the policy won’t cover a theft from a different location. Also, many policies are going to provide liability coverage for many crafts, but only if they have less than 25 actual horsepower.
In some cases, your homeowners policy will have coverage for something you expect or would think it should. However, the coverage might actually be rather minimal. For extra coverage on such things, get an endorsement added to the policy covering you.
Valuable property: This would include things like gold, silverware, watches, furs, and firearms. Standard policies usually only provide a thousand dollars of coverage in the case of jewelry theft.
Replacement costs: The majority of policies out there use what’s called an actual cash-value basis in order to determine the final settlement amount of any items that are damaged or lost. It takes depreciation into consideration. You can add a replacement cost endorsement to your policy, and that pays claims based on what it would cost to replace particular lost items without depreciation being factored in.
Higher medical and liability payments: Liability for medical expenses for third parties and any legal bills racked up in the defense against claims filed against you can wind up involving astronomical numbers. Increasing the liability limits of your policy can give your financial future better protection.
The content provided here speaks generally of standard homeowner’s policies. The information that is provided here is a general overview for your own convenience but should not be interpreted as actual insurance advice. The laws of each state vary, and of course each policy is different. So, should you need answers or information regarding your own coverage and policy, you should consult your insurance agent or carrier to find out the specific details pertinent to your own situation.
If any of the exclusions or minimal coverages listed here concern you, or if you discover even more that make you uncomfortable when consulting your insurance professional or provider, then do something about it sooner rather than later. The right endorsements, addendums, or separate policies can make you sleep a lot sounder at night, and the expenses of such premiums are often just the price of protecting what is yours.