Know Your Limits: What Is Not Covered By Homeowners Insurance – Guest Post
Every policy geared at insuring your home is going to be a little different depending on the insurance provider you go with, the level of coverage you choose, and the diligence with which you track changes in what is offered by the company that insures you. You’re simply going to have to go over your policy with a fine-tooth comb in order to see exactly what is covered, assuming that anything not expressly stated is not going to be covered.
However, that could leave a pretty large list of things that would not fall under your policy, and that can be a bit disconcerting considering how much you’re paying to insure your biggest asset: your house. So here are just a few things that may not be covered and what you can do to protect your home.
1. Natural disasters. In many cases, natural disasters like floods, earthquakes, tornadoes, and so on are not covered by a standard homeowner’s insurance policy. Although some areas that are prone to these disasters will require you to carry this insurance as an addition to your homeowner’s policy, low-risk areas generally won’t call for such coverage, meaning your policy provider may not even make the recommendation. However, you may still experience these natural disasters, so you should talk to your provider about the likelihood of such events and whether or not you should take out a policy that covers them.
2. Liability. Did you know that if guests or workers in your home suffer accident or injury on the premises you could be responsible for their medical bills and any legal action they take against you? Wouldn’t you prefer to be covered by insurance in case of such events? Suppose your dog bites the mailman, a workman falls off the roof, or your child’s friend leaps off the top step like a superhero only to break his leg on the way down. Each of these occurrences could result in a hefty payout on your part, so find out if accident liability is covered by your policy instead of assuming that it is (possibly wrongly).
3. Home-based business. If you run a business out of your home, there’s a good chance that it isn’t covered by your homeowner’s insurance. While working online as a personal assistant won’t require you to take on any additions to your policy, businesses that require you to manufacture goods in your home or have employees working with you on your property could pose a risk since they almost certainly won’t be covered. And what if you are sued by a client or consumer? How will you pay for a settlement against you? These are all things you need to talk to your insurance provider about in order to make sure your business is covered.
4. Assets in the home. Although most policies have some provisions to cover valuables in the home in case of theft or some sort of natural disaster, not all of them offer this addendum, while some require you to report on assets beforehand. Even then, they may require proof such as photographs or serial numbers. You need to know what is covered and what is required for home insurance before disaster strikes.
5. Future assets. Most people buy a home with the intention of waiting for the value to appreciate so that it can be sold for a profit. But your insurance may not account for this adequately. For this reason, you may want to opt for some kind of blanket policy that covers future appreciation and accumulation of assets so that you don’t wind up with less than you bargained for.
Elizabeth Retton writes for Policy Expert where you can find the right coverage and design your own home insurance policy.