Just because an individual has a homeowners policy or renters insurance doesn’t mean that they are covered for everything. Sometimes individuals assume that because they have insurance, they don’t need to worry about checking into specifics. However, without understanding what may or may not be covered, in the event of a claim, it’s better to know beforehand rather than adding insult to injury and finding out there wasn’t coverage.
- Flood coverage. In most cases this is excluded on a homeowners policy. Coverage can be obtained separately through a broker found here. Additionally, many policies exclude water or sewer back-up. Individuals concerned about water/sewer back-up can generally get an endorsement for this coverage added to their policy.
- Trampolines and pools. Individuals that have a trampoline or a pool (or recently acquired these items) should notify their insurance carrier immediately. Some carriers will specifically exclude any liability claims resulting from injury or death related to pools or trampolines. Other carriers may deny a claim if they weren’t notified the items existed. Carriers that do allow them generally have rules that include proper fencing, locking gates and safety apparatuses to prevent or reduce the risk of injury or death. Parents should consider whom they let swim or jump. Neighbors can be great friends until one of their kids is hurt. Then all bets are off.
- Jewelry, antiques, collections. Generally, most insurance policies provide limited coverage for these items. The good news is that for a few dollars more, these items can be endorsed and have their own coverage amounts and deductibles. If an individual owns expensive jewelry, has firearms, coin collections, or expensive musical instruments (say, a grand piano in the living room) chances are these need to be endorsed on your homeowners policy.
- Insurance is for catastrophic loss. If an individual has a low deductible on their home or renters policy they should consider raising it. This is especially true if they rarely, if ever make claims. Consider a deductible of at least $2,500 and up to $5,000. This money should be set aside in the emergency fund.
- Many homeowners add to their home, upgrade kitchens, finish basements or make other home improvements. It’s important to notify the insurance company of these changes. Yes, the premium may increase, but in the event of loss, the homeowner will want replacement coverage for the upgraded material, not what was replaced. This is also true if a policyholder starts a business run from the home. Some carriers provide coverage for home businesses with property and liability extending from the personal policy to the business. However, when in doubt, ask your carrier. They will let an individual know if their home policy covers them, or if they need separate business insurance.