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Ways Your Homeowners Insurance Is Leaving You At Risk
2010-07-17
Purchasing a basic home owners insurance plan is a good first step for protecting yourself from the massive costs incurred from a variety of circumstances. Unfortunately, most basic insurance plans have several glaring holes in them. Often, home owners fail to recognize these insurance gaps, and are left paying damages out of pocket. Common risks not covered by the average insurance quotes include natural disasters, sewage backup, rebuilding costs, and collectible items or heirlooms. The average home owner need not invest in coverage for every gap, especially if the risk of a particular hazard is quite low. Instead, owners should assess the risks common in his or her region, as well as any individual circumstances. This knowledge can be used to choose the necessary type of coverage for more significant risks.
Natural Disasters
Few insurance quotes include the cost of damage from natural disasters such as floods, typhoons, earthquakes, hurricanes, and tornadoes. Many insurers also avoid covering fire damage for home owners residing in or near densely wooded areas. Home owners should determine the type of disaster insurance needed based on local weather patterns. For example, coastal home owners are encouraged to invest in flood and wind coverage in case a hurricane or typhoon causes significant damage. On the other hand, those living in arid climates would probably find flood coverage a waste of money.
Sewage Backup
One of the most commonly missed gaps in insurance is water damage caused by the backup of the sewer or drain system. Many homeowners mistakenly believe that water damage caused by sewage backup will be covered by flood damage, and fail to realize this oversight until their claims are denied. Fortunately, water damage can be covered at a surprisingly low price. Given the steep cost of repairing a basement damaged by sewage backup, water damage coverage may be a worthy investment.
Rebuilding
Home owners insurance quotes will include the cost of rebuilding a home as it was prior to damages. But anything over and above this must come from the owner's pocket. This can be a huge problem for anyone living in old houses, which often require updating in order to maintain housing codes. A building ordinance rider will help owners cover the cost of complying with new building codes.
Collectibles
Technically, insurance quotes do cover the cost of possessions such as heirlooms and collectible items. But the amount covered is rarely over $2,000, which is hardly enough to cover the cost of valuable artwork, antiques or other collections. Floater policies add extra coverage for valuable items but require verification in the form of receipts or an appraisal.