When it comes to your homeowners insurance, it is best to know what coverages you do and do not have. This can save you a lot of trouble and money down the road. Hundreds of thousands of Gulf Coast residents were without flood coverage on their insurance. The majority had no idea that their losses would not be covered by their homeowners policies. But there are many intricacies to insurance. Have you ever read your policy carefully from front to back? If not, you could be opening yourself up to loss. Even if you read it, you should make sure that you understand everything. Don't be afraid to discuss your policy with your agent. That is what the agent is there for. Keep in mind that no homeowners policy covers damage by flood waters. Some policies even exclude "surface waters" or water blown by wind storms. Flood insurance is available through the National Flood Insurance Program for damage up to $250,000. Mold is another point of confusion. Coverage can vary depending on the policy. For example, State Farm doesn't cover mold at all. Allstate provides up to $10,000 in mold damages caused by a covered loss. Firemen's Fund offers an additional mold coverage. Many insurers single out aggressive breeds of dogs for liability reasons. Don't think that your dog will be ignored. For example, Allstate will not issue a policy to owners of Presa Canarios, pit bulls, Dobermans, wolf breeds and other large breeds in forty different states. Other insurers may refuse a policy if the animal has a history of biting. Hiding the fact that you have a large breed dog can leave you wide open for a lawsuit. Make sure you know your policy's sublimits, which cap damages for individual items or expenses. We were once told that our jewelry and firearms would be covered by a policy, only to read it and find sublimits that were incredibly low compared to what we own. You should also check to make sure that your replacement cost coverage is adequate. The cost of replacing an item can often be much higher than the actual depreciated value. If you live in an area where construction costs have grown rapidly or you are at risk for a natural disaster, you should consider replacement coverage on your home. You should look for a plan with caps as large as 150% to 200% of the actual value. Talk to your insurance agent about your policy. Ask plenty of questions. Run different scenarios by the agent to make sure that you know what to expect. The insurance industry is regulated by the state, so policies and practices can vary widely from place to place. Whenever you take out a new policy, make sure you review it. Don't simply assume that they are all the same. They aren't. |
