Have you ever read Tolstoy’s War and Peace? It’s a piece of cake compared to reading and fully understanding the typical homeowner insurance policy. In the real world, consumers are mostly interested in keeping their premiums low. They trust their agent to pick out the policy that best meets their needs.
We think it’s a good idea to have a deeper understanding of a policy beyond how much it will cost each month.
For example, there are risks and property that you might reasonably expect to be covered by your policy that may not be. It’s a good idea to carefully examine the exclusion clauses to determine if any of those line items affect your home.
To give you a head start on that task, we have listed some of the most common misunderstood exclusions and coverage limitations.
If you have a pool, or you are considering buying a home with a pool it’s important to know that coverage will be limited or maybe even disqualifying. Some companies will not insure a home with a pool while others put limitations on property and liability coverage. Most companies will not insure screened pool enclosures or provide liability coverage for diving boards or slides.
Many companies have lists of aggressive breeds like pit bulls and will exclude them from your personal liability coverage. Dogs bite 4.7 million people each year. If your dog takes a chomp out of a visitor, even if it’s a Yorkie and not on the list of aggressive dogs, you can expect your premium to go up.
Some Water Damage.
Generally speaking, water damage that’s not caused by weather-related flooding is covered if it is the result of a calamity or is accidental, like burst hoses on a washing machine. Insurance typically will not cover damage due to owner negligence. If you have turned off the heat during your winter vacation and a pipe bursts, that most probably will not be covered. Sewer backup is not covered unless you purchase a separate policy. Something to think about if you have a septic system.
Even though these little critters can do a great deal of damage, termites are not covered by most homeowner policies.
Earthquakes and Sinkholes
Most standard policies will exclude both of these risks. You may think it’s no big deal because you live in an area where these events are rare. It might surprise you that there were more earthquakes in Oklahoma than California in 2018. Some companies will write separate policies to cover these types of events.
No private insurance company can offer flood insurance although most can quote and broker a policy through the National Flood Insurance Program. The federal government is the only provider of flood insurance.
A new trend is for homeowner insurance companies denying water damage claims that are the result of slow leaks. A slow leak is one that is not fixed or resolved after 14 days even if there is no visible evidence of the leak. Another reason to check condensation drains and collection pans in the attic to ensure there is no water overflowing.
This is not an all-inclusive list and we encourage you to review the exclusions in your policy and consult with your agent with any questions or concerns you might have.
How To Get Covered
Coverage for some of these exclusions can be added to your homeowners policy with an upgrade or rider. Others require separate policies of their own. Always review your policy with your agent to make sure you’re getting the vital coverage you need to protect your home.