Beyond Basic Homeowners Insurance

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Many homeowners believe that even basic homeowners insurance covers almost any catastrophe that can cause damage to a home. However, many people are unaware that basic coverages often exclude or restrict coverage in some areas. Although the coverage can be added for an additional cost, the following items are normally not covered by the average homeowners insurance policy.

Flood Coverage

Almost all homeowners policies exclude flood damage as well as other natural disasters such as damage from earthquakes. A flood is one of the most common causes of damage to a home, whether the flood is caused by a natural disaster, such as a hurricane, or burst pipes inside the home. For those who live in areas prone to floods, separate flood insurance is available and may be required by your mortgage company. In areas that are not prone to flood, your insurance agent can inform you if floods caused by burst pipes or sewer backups are covered by your policy.

Replacement Costs

If your home is damaged by fire, you may lose items inside the home such as your refrigerator, computer or other appliance. If you do not have replacement costs included in your homeowner’s policy, you will be given the value of the appliance based on depreciation and current market value. Replacement costs provide you with the cost to replace the same item with a new appliance with the same features. For example, your computer may be four years old and only valued at $250. A new computer with the same features may cost $900. If you have replacement cost coverage on your policy, the insurance company will give you $900 to replace the computer, rather than its $250 value.

Loss of Use

In some cases, your home may be too damaged for you to live in as repairs are being made. However, if your homeowner’s policy does not have loss-of-use coverage, you will be responsible for the cost of a hotel, meals and other services. Even with loss-of-use coverage, you will more than likely be limited to a daily amount that the company will pay for lodging and meals while your home is being repaired. In addition, some policies have limits on how long they will pay for such services.

Visit your local insurance agent to discuss your policy coverages and what is necessary to add any coverages you feel are necessary.