Choosing Insurance Doesn't Have To Be Stressful

3 Things Your Homeowner's Insurance Might Not Cover- And What You Can Do About It

You depend on your homeowner's insurance to protect your home and belongings from a potential disaster. However, it is vital to thoroughly read through your policy so that you know exactly what is covered. Damage or financial losses that result from the following causes is generally not covered by a conventional homeowner's insurance policy. Know what steps to take to ensure you are protected.

1. Flood Related Damage

The conventional homeowner's insurance policy does not cover damage caused by flooding. Many homeowners mistakenly believe that they do not need flood coverage because they do not live in a flood plain. Approximately, 25 percent of flood claims are for homes that are not in a flood plain. On average, damage caused by flooding results in a claim of $30,000.

The Fix

Homeowners are able to purchase flood insurance through the National Flood Insurance Program for coverage of up to $350,000. This coverage includes a maximum of $250,000 for dwelling replacement and $100,000 to replace the contents of the dwelling. Premiums are reasonable and run about $700 a year.

If this amount is not sufficient to replace your home and your belongings, you can purchase a supplemental policy through your insurance agent.

2. Damage Caused by Poor Home Maintenance

Some insurance policies do not cover damage that results from improper home maintenance. For example, if you do not properly winterize your home, your policy may not cover any resulting damage. If your lack of care causes your home to suffer from mold, the cost to remove the mold and fix damaged areas may not be covered.

The Fix

Follow proper home maintenance procedures. Promptly perform winterization procedures, keep your gutters clear, and inspect and repair components of your home on a regular basis.

Also, comb over your insurance policy so that you know exactly what is excluded.

3. Earthquake Related Damage

Your average homeowner's policy does not cover damage due to an earthquake. It is important to note that many policies do cover fire related damage, even if the fire itself is caused by the earthquake. Your auto insurance policy generally covers earthquake related damage to your vehicle.

Homes located near a fault line are obviously at risk, but the effects of an earthquake can be felt miles away from the fault line.

The Fix

You can purchase a supplemental earthquake insurance policy from your insurance underwriter. If you live in California, you can purchase coverage through the California Earthquake Authority. You can elect to cover just your home, or you can select a policy that covers your home and its contents.

Premiums vary greatly based on the likelihood of an earthquake. For a home in a low risk state, insurance may cost only $.50 per $1,000 of coverage. If you purchase $150,000 of coverage, this results in an annual premium of $75.

Insurance for homes in higher risk areas can cost as much as $1.75 per $1,000 of coverage. For $150,000 of coverage, you can expect to pay $262.50 a year.

Though homeowner's insurance is a terrific way to protect your investment in your home, it might not be enough. Consider what your policy excludes before declaring yourself safe from the unexpected. Adding supplemental policies to your homeowner's insurance seems expensive, but going without these policies may be even more costly. Contact an insurance carrier, such as Estabrook & Chamberlain Insurance Inc, for more information.