February 20th, 2016 11:50 AM by NE TEXAS REALTY GROUP
Iris Price | Improvement Center Columnist |
February 18, 2016
Have you read your most current homeowners
insurance policy, or did you pay the premium and stash the paperwork for future
If you think your policy protects you from
every home-related loss, you may sadly discover when you try to file a claim
that your policy doesn't cover everything you thought it would. Even more
distressing, your policy may not protect you if your insurance company
determines that your loss resulted from failing to properly maintain your home.
Knowing before disaster strikes which
losses your insurance covers -- and which ones it doesn't -- provides you with
more helpful options:
You can take
preventive measures to avoid damage or loss from homeowner negligence.
If available, you can
pay extra to purchase protection for certain losses that a standard policy
doesn't cover or doesn't cover adequately for your circumstances.
First things first -- here's what you can
expect your insurance to cover. If yours is a "Named Perils" policy,
it lists the specific perils covered. Open Perils policies list those risks
that are excluded. Standard insurance policies -- Basic form (HO-1), Broad form
(HO-2) and Special form (HO-3) -- cover sudden damage to your dwelling and its
contents caused by these common perils:
Fire and lightning
Riots or civil
Windstorms and hail
Unless specifically excluded, the Broad and
Special form policies also cover loss to the dwelling and its contents from the
Falling objects --
everything from trees to space debris
Heavy ice, snow and
Leaking pipes caused
by accidental cracking, bursting or freezing
So what does that mean for what homeowners
insurance doesn't cover?
Floods. Homeowners insurance never covers floods, so if you live in a
flood zone, you may be required to purchase separate flood insurance. Don't
expect to get reimbursed either for wet basements unrelated to flood waters.
Improper grading is typically the cause for water to flow toward the house
instead of away from it, in which case, you're responsible for maintaining the
Windstorms. In most places, damage from tornadoes, hurricanes, and high
winds is covered up to the limits you choose for your policy, but there are
notable exceptions. Your home may not be eligible for a standard policy because
of its age or condition. In some states, you're required to pay a separate
deductible for damage from windstorms, and in areas prone to heavy windstorms
such as the Midwest and coastal Florida your policy may exclude coverage
entirely. You may have to purchase a separate policy or an endorsement for
windstorm damage. Protecting your home with wind-resistant roofing
and replacement windows
may be some of the best protection in wind-prone areas -- and may also qualify
you for a discount on your premium.
Earthquake. Your standard policy does not cover damages or loss if the
earth moves -- unless it causes a fire that results in damage or loss. You must
purchase a separate earthquake policy or endorsement from your insurer to cover
other types of damage or loss to the structure or its contents in the event of
an earthquake. In California you also have the option of purchasing earthquake
insurance from the California Earthquake Authority.
Sinkholes. In Florida, sinkholes can open up under your house -- and in the
case of one unfortunate homeowner, swallow you up. Florida insurers must offer
additional coverage for "catastrophic ground cover collapse" at an
Foundation cracks. Unless it's a direct result of one of your
covered perils, your insurer considers structural damage your responsibility.
Take steps to maintain the ground and grading around your home's foundation.
Something as easily avoided as a clogged gutter or downspout could be the cause
of serious foundation problems that can eventually affect your entire house.
Nuclear power plant accidents. No homeowners policy protects against nuclear
accidents; however, nuclear plants by law must carry liability insurance that
covers homeowner losses, including living expenses if your home is
uninhabitable, property damage, and illness.
War. NBCR attacks -- nuclear, biological, chemical, and radiological
-- are considered uninsurable and excluded from coverage, even without a formal
declaration of war. Damage or loss from acts of terrorism, however, can fall
under the category of civil disturbances, explosions, and/or smoke, which are
covered by standard homeowners policies.
Mold and other damage from leaks. Most policies protect you if a pipe bursts in
your house and your home has water damage as a result. They also cover you if a
tree, a piece of an aircraft, or a meteor falls on your house, and if heavy
snow, ice, or hail cause your roof to spring a leak. In those instances you're
expected to stem the damage in a timely manner, but at least you're covered. On
the other hand, if your pipe bursts and it's been leaking long enough to cause
extensive mold, rot, damaged ceilings, walls, and floors, don't expect the
insurance to cover it.
Sewer or drain backup. Did you think that your old sewer pipe was
the city's responsibility? Unfortunately, it's yours. Causes of sewer backups
include roots growing through the pipe, sewer systems that combine storm runoff
and raw sewage, and blockages in the city main. Even if you have a sump pump,
it may not be able to handle the run off. If you want to be safe rather than
sorry, you can take a number of measures to prevent sewer backup, as well as purchase additional coverage
for around $40-$50.
The expense of additional policies or premiums
can really add up; the average cost of homeowners insurance nationwide is
$1,034, according to figures compiled in 2015 by the National Association of
Insurance Commissioners (NAIC). That may seem like a lot, but if you can't
afford to replace your home or its contents in the event of a catastrophe, take
steps to make sure you are adequately protected.