Does your Home Need Optional Insurance Coverage?
If reading through your homeowners insurance policy leaves you feeling confused and overwhelmed, you are not alone. Though all policies differ, there are some general guidelines for what situations are typically covered and which are not. Depending on your situation, optional insurance coverage might be necessary to protect yourself and your family.
What is Generally Covered Under the Typical Homeowners Insurance Policy?
The goal of homeowners insurance is to protect you from financial loss after an event that is covered by your policy. The policy is intended to safeguard your home’s structure, your personal belongings, and your liability for other’s injuries that are sustained on your property or that you might otherwise be responsible for.
However as each policy is different, how much coverage and what specifically is covered can vary from policy to policy. The standard homeowners policy is referred to as an HO-3, and generally protects your personal property from the following:
- Fires, windstorms, hail, lightning
- Riots or civil disturbances
- Aircrafts, vehicles, or falling objects
- Theft or burglary
- Weight of ice, snow, or sleet
- Freezing of plumbing, air conditioning, or other household systems
This standard policy covers many of the common issues that homeowners face. But there are many situations that may require you to consider optional coverage to protect your home.
What Optional Insurance Policies Are Available?
Each insurance company will offer different packages for coverage for your home. Whether an optional insurance policy can benefit you depends on where you live, what you own, and what you want protected in case of an accident.
Contrary to popular belief, flooding caused by outside water is not covered under your standard home insurance policy. Flood insurance can be purchased from any insurance agent, and be aware that unlike most policies, it takes 30 days to take affect. This is an optional insurance policy that is recommended for people in areas that are prone to flooding, hurricanes, or coastal weather.
Law and Ordinance Coverage
This coverage is especially helpful for those with older homes. If you home is damaged or newer building codes require upgrades or rebuilding, this coverage pays the difference.
If you live in an earthquake prone area, this may be an insurance policy worth investing in. Earthquake damage is not covered under your standard policy and can be purchased additionally for a reasonable cost.
Special Coverage for Contents
Designed to provide broader protection for your property, this policy will reimburse you for possessions in more situations than a standard policy.
Contents Replacement Cost Coverage
This popular optional add on is designed to reimburse you for the replacement value of any lost items, as opposed to the value of the item with a deduction for depreciation.
Valuable Items Plus
If you have expensive items that need additional coverage in case of loss, this policy might be worth investing it. It provides higher limits of reimbursement for items like jewelry, fine arts, furs, cameras, antiques, and computers.
Coverage for Water Back Up
This policy provides a specific dollar value if you experience a water back up through your sewer or drain, or if water overflows or is discharged from your sump pump.
What if My Situation is More Unique? Are There Specialty Optional Coverage Policies?
There are policies that can cover just about any property or possessions. If you have a unique situation that requires additional coverage, like owning rental properties, running an at home day care, or owning an older home, there are policies that can cover your possessions and give you peace of mind.
Increased Building Structure Coverage
This optional insurance policy is an additional dwelling coverage for extreme cases where your original coverage limits aren’t enough to cover your expenses.
Identity Theft Coverage
Everyone is familiar with identity theft and the costs associated with the theft. This coverage provides a service to help repair your damaged name and credit.
Fair Rental Protection
This coverage is designed to reimburse any lost revenue you might experience from owning a rental property that is left uninhabitable due to a covered loss.
Home Day Care Coverage
If you have an at home day care, this coverage can benefit you by reimbursing lost revenue and medical bills if there is an accident in which you are legally liable.
Policies of this type help to protect your liability if you are responsible for a multi-unit building and a tenant is injured. It also protects the units themselves.
Choosing a homeowners policy and any optional coverage can be complicated, but take the time to read your policy and verify that it covers everything that you need to protect your home. If there are valuable things you don’t want to lose, make sure you have coverage for them to protect your financial future.
If you’re having any problems with an insurance claim on an existing policy, reach out. It’s what we do.