The world can be a chaotic place, and we need to protect ourselves against any disasters that may come our way. This includes protecting our most valuable assets, such as our home. Homeowners insurance can be an excellent way to shield your property when calamity strikes. However, it is essential to fully understand what homeowners insurance does and does not cover.
Common Homeowners Insurance Coverage
Any standard homeowners’ insurance policy should outline what is and is not covered. Coverage that pertains to dwelling and other structures, for example, protects you against what is known as open perils. This essentially means that your coverage extends to everything except what is specifically named in that section of your policy.
Contrarily, “personal property coverage” signifies that you are protected against all the named perils listed in your policy.
Most homeowners’ insurance policies that include personal property coverage should be able to protect you against these common perils, per a standard Insurance Services Office HO-3 policy, a template used by most insurance companies:
- Windstorm or hail
- Fire or lightning
- Snow, ice, and sleet
- Falling objects
- Freezing of plumbing system
- Accidental discharge (or overflow) of steam or water
- Volcanic eruption
- Accidental damage stemming from an artificially generated electrical current
- Accidental burning, cracking or swelling
According to the Insurance Information Institute, homeowner claims related to wind or hail were the most frequent between 2014 and 2018. The costliest claims in terms of total losses suffered were those pertaining to fire and lightning. The weighted average of homeowner losses due to fire and lightning during this four-year span was $79,785.
If you have a pool, whether it is in-ground or above-ground, any damage it sustains can be covered by insurance if it was affected by any of the perils in a named or open peril policy. However, liability coverage as it relates to pools can be more complex, so do not hesitate to ask an insurance company if it offers personal umbrella policies.
What Homeowners Insurance Does Not Cover
Here are some of the incidents that a standard homeowners’ insurance policy typically does not cover:
- Water damage due to flooding, tidal waves, groundwater, or a sewer backup
- Power failure
- Earthquakes, mudslides, landslides, sinkholes, etc.
- Nuclear hazard
- Destruction by pets/animals you own
- Birds, rodents, or insects
- Governmental action
- Mischievous behavior
- Fungus, mold, or wet rot
- Ordinance of law (i.e. the government forces you to rebuild or tear down your home so that it complies with local regulations)
Insurance policies do not cover many of these claims because they relate to incidents that are often either the homeowner’s fault or because an insurance company can not resolve them. Be sure to contact an insurance provider if you do not understand why these types of incidents are not covered.
Do I Need To Acquire A Policy?
It can often be difficult for many homeowners to decide whether or not the benefits of acquiring an insurance policy outweigh the costs. Part of the reason for this may be that many homeowners in the United States are struggling to afford their mortgage alone, especially when home prices skyrocket and unemployment is high. Ultimately, all homeowners should purchase homeowners’ insurance policies to protect themselves from the financial risks and liabilities of these dangers.
Reach Out To The Personal Insurance Brokers Today
Contact the professionals at Merchant Family Agency to learn more about what a homeowner’s insurance policy can and can not cover. Located in both Orlando and Atlanta, we have been serving the residents of these communities since 1995. We are dedicated to continuing this great service. We are proud to work with 15 different insurance carriers and always seek to provide our customers with high-quality and versatile products.
At Merchant Family Agency, we also seek to take advantage of highly innovative technological resources to assist our customers. We strive to help find a policy to suit every client’s unique needs. Contact Merchant Family Agency today for more information about our solutions.