It’s not unusual for the average person to not know every detail of their home insurance policy. Even insurance professionals have to look at the policy from time to time to confirm their beliefs. However, there are some pretty common misconceptions of what is covered in a home insurance policy that can have some serious consequences. Therefore, we’ve assembled a list of some major misunderstandings and also how to remedy some of them.
Unfortunately, too many homeowners just don’t understand that flood insurance is not part of the standard home insurance policy. Flood policies are separate policies from your regular policy form. Therefore, if you don’t have at least two different policies, it’s pretty likely that you do not have flood coverage. The other problem is that those who realize this may not fully understand what constitutes a flood. It’s not uncommon for people to only think of floods as major events that wipe out entire neighborhoods. Unfortunately, fairly small events of rising water can be construed as a flood event by your policy and will not be covered. You should read your policy’s definition of what constitutes a flood and think about the possibility that such an event can affect your home.
As with flood, earth movement of any nature is excluded by the home insurance policy. This means that earthquakes aren’t the only excluded form of earth movement, just the one that’s most commonly thought of. Earthquake coverage is generally procured with a separate policy, just like the flood policy, and you should think about all the ways earth movement might damage your home before dismissing the need for coverage. In addition to earthquakes, the policy excludes all costs to repair land that has subsided or is unstable. This can undermine your entire house but it’s not normally covered in the policy.
- Maintenance or Workmanship Issues
The intent of your home insurance policy is to cover damage to your home or property as a result of unexpected or uncontrollable circumstance. Damage as a result of a lack of maintenance or poor workmanship is considered to be within your control and is not covered. It’s important to understand that a home insurance policy is not a home maintenance or home warranty policy. You must take the necessary steps to maintain and protect your home. Certainly you should not expect your home insurance policy to cover these damages.
Believe it or not, damage to your home as a result of military action is not covered by the policy. It doesn’t matter if it’s a declared or undeclared war, it’s still not covered. Additionally, if it’s the result of a nuclear weapon (even if accidental), it’s considered to be a warlike action and will also be excluded. Unfortunately, there’s not much you can do about these situations!
As you can see, some perils are not covered on the standard policy but can be picked elsewhere in a specialized policy. Also, some other perils simply will not be covered. As a homeowner, you should really understand the key exclusions in your home insurance policy and decide if the risks should be insured elsewhere.