01 May 6 Things Most Home Insurance Policies are Missing
If you finance your home with a mortgage, your lender will require you to have a home insurance policy. Home insurance is useful for protecting you and your home against unforeseen damages and loss from perils such as fire and smoke, vandalism, theft, windstorms, and more. Most standard policies include coverage for the structure of your home, detached structures, personal belongings, liability protection, and coverage for additional living expenses.
While this may seem all encompassing, it’s not always the case.
Whether you’re buying your first home or moving to a new one, there are often circumstances and goods that homeowners are surprised to learn are not covered by their home insurance policy.
To help you avoid any potential lapse in coverage, we’re shining a light on the 6 things most home insurance policies are missing. Read on!
Omission #1: Not having a customized home insurance plan
It’s important that your home insurance policy covers your specific needs, grows with you over the years, and remains up to date. Each of us has unique needs and situations, and your home policy should reflect that. What’s important to one person may not be important to another; if you think something is important, then it should be covered on your policy.
At Clark, we do a variety of things to make sure our clients get the policy they need. If you’re a new customer, we will walk you through a checklist that helps us assess your specific risk and coverage needs. We know that what is important for one person, may not necessarily be for another. We also know how easy it is to forget to include a loved heirloom or ring, and our checklist will make sure we uncover everything you need.
And speaking of forgetting, it’s easy to get caught up in a situation and forget about updating your insurance. Those situations could be things like having a new driver in the house or celebrating an anniversary with a new piece of jewelry. It could even be putting an addition on the house. No matter the situation, it’s important to update your insurance policies.
Omission #2: Not having insurance coverage for water back-up
You can’t plan for the unexpected, but insurance can help you be prepared should something happen. In the case of water back-up, it is difficult to predict when water damage is going to occur, so water back-up coverage is not often discussed (or possibly even flood insurance depending where your home is located). Water backup coverage is an optional enhancement to a homeowner’s insurance policy and provides coverage for loss resulting from water that backs up through sewers or drains or that overflows from a sump pump.
Omission #3: Not scheduling items
A lot of homeowners think everything in their home, all their personal property, is automatically covered for replacement cost under their home policy. While most items are covered, there are some that need special attention and need to be put on what is known as a ‘schedule’ or list. Scheduling items establishes a benchmark of value as well as proof of ownership that greatly speeds up the claim process, should something happen to the item.
That’s necessary because your policy provides a set limit for types of personal property. For example, it may cover only $1,500 for jewelry. The problem lies with the $2,500 worth of jewelry that your grandmother left you. In the event a claim, you would run up against the $1,500 limit and may not be able to get the full value back.
For examples of and tips on the items to schedule, download our Dos and Don’ts of Scheduling Items Checklist here.
Omission #4: Not bundling
There is value to be had in packaging and bundling your insurance services, yet many people overlook it. Bundling is when you buy the different types of insurance you may need (auto, boat, home) from one provider. Many providers frequently offer substantial discounts on premiums if you buy more than one type of coverage with them.
Omission #5: Inadequate coverage for an in-home business
With more and more people running businesses from their homes, there’s been a rise in cases of inadequate coverage. The problem comes in thinking that, because you’re running your business from your home, it will automatically be covered by your home policy.
While a homeowner’s insurance policy generally covers you against claims for premises liability, if you have a business, you may need additional coverage for its operations, products, and operations liability. That means that if you’re keeping business inventory in your basement and a frozen pipe burst right over it, that loss to your inventory may not be covered at all.
Omission #6: Equipment breakdown coverage
This one is a big misconception. Many people assume that natural wear and tear on appliances is a reason for submitting a claim when, in reality, anything that you as a homeowner can and should maintain is not covered for wear and tear or mechanical failure. This includes appliances like dishwashers, ovens, and washing/drying machines.
There is, though, a way to extend coverage to many of these items, which we want to highlight here. The solution is (you guessed it) Equipment breakdown coverage. This is an easy and affordable endorsement that can be added to your homeowner policy, covering expenses associated with repairs or replacement of covered equipment, damage caused by mechanical and electrical breakdown, and more.
When we say “covered equipment,” common examples include: Air conditioning systems, furnaces, heat pumps, heaters, well pumps, electrical power panels, kitchen and laundry appliances, backup generators, pool heating and filtration systems and central vacuum systems.
It’s important to note as well, that this type of coverage even extends to smart-appliances. This is a growing trend, and for those who enjoy controlling their house temperature, the lights, or oven by voice control – know that equipment breakdown coverage is a great option. Just ask Alexa!
The Dos and Don’ts of Scheduling Items
About Clark Insurance
At Clark Insurance, you’ll find a whole bunch of people passionate about insurance who love helping others. We like to figure out what our customers really need and then find a solution they can afford. Best of all, we like seeing the looks on our customers’ faces when they realize they no longer have to worry about “what if.” Come speak with us. We’ll take care of your “what if.”