Before taking out homeowner’s insurance it is vital that you check the small print of each policy to find out what exactly is, and isn’t covered. There are a number of gaps in policy coverage that can cause you considerable problems in the future if you need to make a claim. Understanding these gaps in cover will result in you being more well equipped to cope should the worst happen.
One of the most common occurrences that can result in serious damage to your property is high winds. Gale force winds can occur in every area of the globe, but are more common in some. If you live in an area prone to tornadoes or hurricanes you may find that your home insurance policy includes a windstorm or hurricane deductible that is distinct from your standard policy. This means that you could have a $500 deductible on your home insurance policy, but your windstorm or hurricane deductible could differ in that it is a percentage of the value of your home rather than a fixed sum. This would mean that if this deductible was set at three percent and your property was valued at $300,000 you would have to pay for the first $9000 of your claim from your own pocket.
If you prefer to keep your cash at home rather than in a bank account then you should be aware that your home insurance policy will not cover very much of it. Usually contents cover for cash held in the home is not more than around $500, so it certainly pays to keep larger amounts of money somewhere safer.
Unfortunately, war and acts of terrorism affect every country, and your home could be damaged as a result of these events. Insurance providers are unable to exclude damage to your property that results from a terrorist attack, but most of them do not provide cover for damage sustained due to war action. In addition, to complicate things even further, whether or not your insurer agrees to pay out depends on the type of attack carried out. If chemical or radioactive weapons were used you would probably not be covered, but if your property was damaged by smoke or fire then you would.
Earthquakes are surprisingly common; there are around 20,000 earthquakes each year which equates to approximately 50 to 55 every day. Insurance cover for damage caused by earthquakes is not usually included as part of a standard policy, but can be purchased separately. The premiums for this type of cover are usually quite inexpensive, unless you live in an area prone to earthquakes, for example, California.
If you live in an area prone to sinkholes developing then damage caused by them is unlikely to be covered by your insurance policy. However, cover is usually available as an optional extra, and is most definitely worth the extra expense if sinkholes could pose a problem in future.
If you encounter problems with your sewerage system you could find that your insurer refuses to pay out for any damage incurred. Most sewer problems are not covered as part of standard home insurance policy, although some do offer a fixed amount of coverage; usually up to $10,000. If sewerage problems are a concern, however, cover can usually be added to your policy for an additional fee.
Damage caused to your home by termites is also another insurance gap. Most insurers do not cover your property for termite damage. In this case, prevention is definitely better than cure; it is far more advisable to hire a pest control company to keep termite problems at bay rather than to rely on your insurer to foot the cost if serious problems arise.
Nowadays, many of us run a home-based business. However, stock, and the materials you use to run your home-based business will not usually be covered by a home insurance policy. It is important that you take out separate insurance for your business; an experienced insurance broker can offer advice with regard to the appropriate types and levels of cover.
Most insurers stipulate that high value jewellery and collectibles should be insured separately, so do not make the mistake of assuming that the entire contents of your home will automatically be covered regardless of their worth. Check the small print of your policy very carefully to find out how much cover your insurer automatically provides, and top this up with additional coverage if necessary.
It can be tempting to avoid reading the finer details of your home insurance policy, and to wrongly assume that all eventualities will be covered. However, this approach can be extremely costly as there are a number of gaps in home insurance policies that can leave you significantly out of pocket should the worst happen. Think carefully about which insurance add-ons would be of benefit to you, and what poses the greatest risk to both the structure of your property and its contents. An insurance broker can help you to assess what sort of cover you need, and, in addition, give you access to the very best deals.