Are You Really as Protected as You Think?
Buying a home is one of the largest financial investments you will ever make. Naturally, you protect it with homeowners insurance. But what if the policy you rely on has hidden gaps?
Many homeowners are shocked to discover after a disaster that their standard policy doesn't cover everything. To prevent a devastating financial surprise, here are five common gaps in standard homeowners insurance policies and how you can fix them.
1. Flood Damage is Not Covered
This is the most common and devastating misconception in real estate. Standard homeowners insurance does not cover flood damage. Whether it's from a hurricane, heavy rain, or a nearby overflowing river, if water touches the ground before entering your home, it's generally considered a flood.
The Fix: You need a separate Flood Insurance policy, usually provided through the National Flood Insurance Program (NFIP) or a private insurer.
2. Earthquakes and Sinkholes
Much like floods, "earth movements" are excluded from almost all standard policies. If an earthquake damages your foundation or a sinkhole swallows your driveway, you will be paying out of pocket.
The Fix: Depending on where you live, you can purchase an Earthquake endorsement or a separate Earth Movement policy.
3. Expensive Jewelry and Collectibles
Standard policies have built-in "sub-limits" for easily stolen, high-value items. While your policy might cover $100,000 of personal property, it typically limits jewelry, watches, or furs to just $1,500 total if they are stolen.
The Fix: Contact us to "schedule" high-value items. Scheduling an item requires an appraisal, but it guarantees the item is fully covered for its actual value with no deductible.
4. Sewer Backup
If the city sewer line backs up and pumps raw sewage into your basement, your standard policy will likely deny the claim. The cleanup and repair costs for this type of disaster are incredibly high.
The Fix: Water Backup and Sump Overflow coverage is an inexpensive endorsement (usually less than $50 a year) that can save you tens of thousands of dollars.
5. Ordinance or Law Exclusions
If your older home is severely damaged, local building codes may require you to rebuild it using modern (and more expensive) standards. A standard policy only pays to rebuild the home exactly as it was, leaving you to pay the difference for the mandated upgrades.
The Fix: Add "Ordinance or Law" coverage to your policy to ensure compliance costs are covered during a rebuild.
Don't wait until disaster strikes to find out what your policy actually covers. Contact Binoi Thomas today for a free, comprehensive review of your homeowners insurance policy.