Policies vary from company to company but certain coverages are uniform across the board. Many carriers will enhance some of the coverage options to make their product unique from those their competitors are offering. The core policy, written on what is called a broad form, will usually state that it covers anything except for those things specifically listed as being excluded. With that said, it’s important to read your policy and discuss it with your insurance professional to ensure that you understand what the insurance company will and will not pay for.
In terms of property, the insurance policy is generally very clear. Your homeowner’s policy will not give you coverage for any item insured under another policy, for animals of any kind, for motor vehicles (which are generally insured under other policies), or for aircraft. The policy will not cover property owned by renters and boarders (they should have their own renter’s policies), property you rent to other people, business property (limited coverage available), credit cards, and more.
There are also limitations to the coverage offered on certain types of property. For example, a regular homeowner’s policy will give you a very small amount of coverage for jewelry, antiques, firearms, coin collections, and other special items. If the value of these items exceed this amount, you will need to buy additional insurance.
Water damage is an exclusion that often becomes confusing. Water damage that comes from the ground including sewage back-up and flooding or overflow from a sump pump is excluded. Water that comes from above, like a leak from roof damage or an ice dam is usually included under your homeowners policy. Other exclusions include earth movement, including earthquakes and mine activity, power interruptions that take place off of the premises, war, and nuclear hazard.
Your homeowner’s insurance will not cover any damage caused by the enforcement of an ordinance or law (construction, repair, or demolition). If you intentionally cause a loss, or direct someone else to do something that causes a loss, you will not be covered. You will also find you are not covered if you do not take reasonable action to save property or protect it. For example, you would not be covered if a tree falls on your roof before a rainstorm, but you don’t take action to put a tarp over the damaged roof or remove property from the exposed room where the rain is leaking.
It’s important to realize that many of these exclusions can be added to your policy for additional premium and some of them are automatically added back by insurance carriers on their individual products. If you have homeowners insurance in the Louisville metro area, talk to your insurance professional about how your policy covers different perils.
In terms of property, most of the items listed above can be remedied through the purchase of proper alternative insurance or riders. Items like jewelry and antiques, can be appraised and then scheduled on your policy for an agreed-upon value.
While not all of the exclusions for perils are reversible, many can be resolved. Flood insurance, for example, is available to everyone. Those who are required to purchase it because of their flood zone rating may find their rates are very high, but those who do not live in areas prone to flooding may find the coverage is very affordable. Other perils, like earthquakes, and mine activity may be added back to the policy via an endorsement.
It is important to read your policy carefully as, again, every policy is different in terms of what it offers and excludes. Once your policy is in your hands, it is your legal responsibility to know what it covers and what it does not. If you have questions or concerns, the knowledgeable agents at Foundation Insurance Group, located in St Matthews, Kentucky and servicing the Louisville metro area are always available to review your current policy and make suggestions to remedy any exposures.