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Matt Lehn

Lehn & Vogt Insurance

www.lehnandvogt.com

www.floridahomeinsuranceservices.com

941-698-8877

Common Home Insurance Policy Exclusions

A homeowners’ insurance policy cannot protect your home from the whims of the weather or the actions of ill-intentioned people, of course. However, it can help you pick up the pieces and get your life back on track after a disaster. If you have adequate coverage, your insurer will reimburse you for your losses, providing the means to pay for the restoration of your damaged property.

However, you should be aware of the fact that standard home insurance policies don’t cover all types of damage – floods, wind, and certain other perils require special coverage that comes at a higher cost. So, in order to minimize your exposure to loss, you may want to consider adjusting your insurance plan. To do so, you need to know exactly what regular homeowner’s insurance does not cover.

Floods

Damage resulting from burst pipes and overflowing water from your plumbing system is usually covered by standard home insurance policies. However, loss from “rising surface water” occurring outside your home, such as overflowing rivers or torrential rain, is not covered.

So, if you live in a flood plain (near a creek, lake, or any large body of water), you may want to consider purchasing additional flood insurance. You can obtain a flood insurance policy through the National Flood Insurance Program or a private insurance company.

Sewer Backups

Homeowner's insurance coverage excludes floods, sewage backups, mold, and other common perils.

Flooding from overflowing rivers or torrential rain is not covered by standard homeowner’s insurance policies.

When a sewer backs up into a home, it can cause substantial damage to floors and walls, as well as to furniture and electrical appliances. Besides, sewage backup poses a great threat to the health and safety of the inhabitants, as it contains harmful bacteria that can spread infection or disease.

Standard homeowner’s insurance, however, does not cover sewer backups. In most cases, you will be able to get extra insurance for this type of damage as an endorsement to your policy. In fact, sewer-backup damage can be covered for an additional premium of just $40 to $50 per year.

Mold

Homeowner’s insurance policies generally offer limited or no coverage for mold damage. If mold growth has appeared due to excessive moisture resulting from long-term leaks, poor home maintenance, construction defects, or naturally occurring floods, you will not be reimbursed for your losses. However, your policy may cover mold remediation costs if the problem has been caused by a sudden leak in the plumbing system (provided that you take immediate action to fix the problem and prevent further damage).

Earth Movement

To get adequate coverage for these disasters, you need to purchase a separate policy . Insurers in Florida  however, are required to provide coverage for sinkhole damage as it is very common in these states. In Florida the basic coverage is called Catastrophic Ground Collapse.

Infestations

Insects (termites, bedbugs, etc.), rodents (mice, rats, squirrels, etc.) and other vermin can cause severe damage to support beams and other wood features, slowly devastating your home. However, this type of damage is not covered in a home insurance policy, as getting rid of infestations and fixing the damage left behind is considered to be the responsibility of the homeowner as a part of the regular home maintenance process.

Damage From Pets And Domestic Animals

Your homeowner’s insurance will not pay for restoring household items or structural elements damaged by pets and other animals residing on your property.

When it comes to dogs, in particular, matters are even more complicated. Most insurance companies provide liability protection in case your dog bites another person,(this coverage is not always automatic) but don’t cover damage to your property (chewed or scratched couches, furniture legs, rugs, etc.) Have in mind though that hostile or dangerous dogs may not be covered at all or could even prevent you from getting approved for a policy (some companies actually blacklist breeds that are known for their aggressive behavior, while others don’t deny coverage based on breed alone but look at an individual dog’s history of aggression). Therefore, it is a good idea to ask about pet coverage in advance if you have a dog.

Cracks And Foundation Settling

Settling, cracking, bulging, or expansion of pavement, walls and foundations are not covered by insurance policies.  Cracking  and settling resulting from earth movement or shift are excluded from homeowner’s insurance.

Wind Damage In Hurricane-Prone States

Make sure your insurance policy covers the most common perils in your area.

Wind damage is among the most common types of damage a home may sustain.

Homeowner’s insurance coverage includes wind and tornado damage, but if you live in a high-risk area for hurricanes (along the Atlantic or Gulf coasts, for example), you may need to buy separate windstorm insurance. Have in mind that insurers usually charge a special wind deductible (instead of a flat amount, these deductibles are calculated as a percentage of your home’s insured value – usually between 1% and 5% – so you may have quite a large amount of your claim payment cut as a result).

Power Failure Or Power Surge

Loss due to power failure or power surge is not covered by the regular homeowner’s insurance policy. The only exception is when a lightning has caused power surge to occur – in such a case, your insurer will reimburse you for your loss as lightning is a covered peril.

Nuclear Accidents

Home insurance does not provide coverage for nuclear accidents but nuclear power companies are required to provide their own liability insurance to cover eventual damages within the area of a power plant. Besides, the Price-Anderson Act from 1957 compensates people in the United States for any damage or injuries resulting from a commercial nuclear accident, including bodily injury, sickness, and property damage. In addition, everyone evacuated from an affected area will be reimbursed for reasonable living expenses.

Acts Of Terrorism And War

Standard homeowner’s insurance doesn’t specifically cover damage from war or acts of terrorism, but the typical policy does cover the homeowner for damage due to explosions, fire, and smoke (the most common types of damage a home may sustain under such circumstances).

Losses Resulting From Failure To Protect A Property After A Disaster

Discuss the specifics of every individual case with your insurance agent.

You will not be reimbursed for any losses resulting from negligence on your part, such as failure to protect and maintain your property.

In the unfortunate event of a natural disaster or an act of vandalism, it is the responsibility of the homeowner to take quick and efficient measures to prevent further damage to the property. Therefore, you will not be reimbursed for any losses resulting from failure to protect your home. It is recommendable to call a professional restoration company immediately after a disaster, as the experts will be able to salvage the remaining part of your property and prevent the damage from spreading. Besides, they will work in close cooperation with your insurance agent to ensure a smooth and beneficial claims process.

Intentional Damage Caused By A Homeowner

Intentional damage to the property caused by the homeowner, as well as any damage resulting from negligence on the part of the homeowner, is not covered by home insurance.

General Wear And Tear Or Defective Construction

Home insurance does not cover general wear and tear as it is the homeowner’s responsibility to perform basic maintenance and keep his/her property in a good condition. Manufacturer’s defects are not covered by a homeowner’s insurance policy, either.

Have in mind that there are some more exclusions to homeowner’s insurance coverage in case your home has been vacant for more than 14 days or if it is still under construction:

vandalism and malicious mischief;

freezing of pipes;

theft, etc.

Insurance for structures used for business, as well as for any cars, vans, motorcycles, aircraft, boats, or other vehicles you own, must be purchased separately.

 These are just examples of policy exclusions. Please refer to your own home insurance policy for specific coverage and exclusions.

Bonus advice: Make sure you discuss each particular case with your insurance agent – even though your policy may not cover you for an excluded event, you may still be covered for losses resulting from it.

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Common Mistakes When Purchasing Home Insurance in Florida.

ONLY FOCUSING ON PRICE

It’s one of the first things you do when you’re shopping: look at the price. And similar to anything else you purchase, it’s important to understand exactly what you’ll be receiving with your homeowners insurance as well. Make sure that your “cheap” policy isn’t less expensive because important coverage has been removed or because the company has inadequate reinsurance. Just like you wouldn’t buy something that’s missing pieces from a store, get what you need in your homeowners coverage.

PURCHASING A POLICY FOR THE WRONG OCCUPANCY

People own homes for many different reasons: to fulfill a dream, raise a family, or maybe supplement the family budget with rental income. Who is living in your home directly determines the type of policy you should have. There is a different policy for people who own and live in their home as opposed to people who own a home that they are renting, or even people who own a home that nobody lives in. In some instances, your claim won’t be covered if you have the wrong policy based on the occupancy of your home. This is because each of these situations carries its own unique risks and are priced for those risks. If the occupancy of your home changes, make sure to update your policy accordingly.

NOT UNDERSTANDING EXCLUSIONS TO YOUR POLICY

Insurance companies have long done away with “all risk” policies, and customers in high-exposure states found them to be cost-prohibitive anyway. Your homeowner’s policy is meant to protect you in the event of a major, or even semi-major, disaster but does not respond as a warranty plan. Take the time to understand from a comprehensive level what is and is not covered.

THINKING FLOOD INSURANCE IS INCLUDED

Many people are not aware that a homeowner’s insurance policy does not include flood coverage. Flood insurance covers your property and/or contents against storm surges and flooding during torrential rains, hurricanes, and tropical storms. Flood insurance can be bought through the National Flood Insurance Program. Your insurance agent can help you learn more about whether it makes sense for you. There is a 30-day waiting period required before a flood policy will go into effect, so it is important not to buy this coverage at the last minute.

UNDERINSURING YOUR HOME

Your mortgage company is only concerned with protecting their asset. Let’s say you own a home that is worth $300,000, but you only owe $50,000 to the mortgage company. Your mortgage company will only require you to purchase $50,000 in insurance coverage. Obviously, $50,000 in insurance is a lot less expensive than $300,000, but what if you have a total loss? You will only receive a check for $50,000 and it goes straight to the bank – nothing for you!

CHOOSING “ACTUAL CASH VALUE” OVER “REPLACEMENT COST” COVERAGE

When you experience a loss, Actual Cash Value will only provide you reimbursement for the “book value” of the item. In many cases an old couch, table, or computer is worth next to nothing so you would receive next to nothing. If you select “Replacement Cost,” you will be given a brand new replacement of that item without any deduction for depreciation.

REDUCING COVERAGE TO LOWER YOUR PREMIUM

People often make the mistake of reducing the amount of coverage in an attempt to bring down their premium. A better approach would be to carry strong coverage and simply raise your deductible. You still have a lower premium and you get to keep your robust coverage. For example, in the event of a large loss, you will only be “out of pocket” a deductible of, say, $1,000 or $2,500 – instead of being out $175,000 to replace all the contents of your home.

THINKING YOUR POLICY WILL COVER SOMEONE ELSE’S PERSONAL PROPERTY

If you are renting out your home and those occupying it experience a loss to their personal property, your “landlord” policy will not cover this loss. Your tenants need to have her/his own renter’s policy to cover their personal property and liability.

NOT GETTING THE “PROS” INVOLVED

Insurance can be complicated, and when you’re purchasing coverage for your most important asset, you want to make sure you have the coverage you need. Agents are required by their state to be licensed and continually educated on all aspects of insurance. They can communicate the important details to you, so you can make an informed decision. Second, agents can compare differences in price and coverage across many companies. Third, when you act on your own, without an agent, you are also on your own if you make mistakes in your coverage. Last, most agents sell many types of insurance policies so you can easily purchase home, auto, life, and much more in one stop.

Article Courtesy of AIIG

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