Getting homeowners insurance may seem like a simple task and you will be covered for everything that can happen in your home. However, this is not true. There are certain coverages that need to be specially added and are not part of a standard policy. They will probably incur an additional premium, but they are something to consider. Some of these policies are listed below.
1. Replacement cost – Many people think that if a catastrophe happens that everything in their home is covered and will be replaced. Unless you have replacement cost coverage, the insurance will only pay what your belongings were worth at the time of the incident. This means that if you purchased a television two years ago for $2000, it may only have been worth $200 at the time of the incident. This will not be enough for you to replace the item, but that is what the insurance will pay. If you get the additional coverage, the insurance company will pay you the $2000 so you can get a comparable new television. This coverage will result in an increase in your premium, but if you ever need it, it will be well worth it.
2. Loss of use coverage – Sometimes damage to your home is so bad that you cannot live in the home while it is being repaired. Most people think that the insurance company will pay for you to stay in a hotel while the work is being done. This is not true. This is another addition to your policy that will have to be added if you want to take advantage of this service. If you purchase this kind of coverage, the insurance will highlight how long they are willing to pay for the hotel and a per diem amount. As with other policy additions, the premium will increase, but can help avoid financial devastation if the benefit is needed.
3. All injuries in the house are covered – It is a common misconception that anyone who gets hurt in your home is covered under your homeowner’s insurance if a claim is filed. Only visitors are covered under your homeowner’s policy if they get injured on your property. If you or a family member are hurt, the claim must go through your health insurance plan.
4. Flood/earthquake coverage – Coverage for damage from a flood or earthquake is typically not covered under a standard homeowner’s policy. You may think that if these kinds of catastrophic events happen the insurance company will cover repairs. In fact, most policies exclude flood, earthquakes, and other natural disasters. Depending on where you live, your mortgage company might require you to purchase this kind of coverage.
So, make sure you look over your homeowner’s policy and get all the coverage you feel is relevant to you. While it may result in an increased premium, it is invaluable if you need to use it.