It’s important to understand what your homeowners insurance policy covers. A quick review of your policy will help you know the finer details. Your insurance agent can go over your policy with you to make sure there are no misunderstandings.
No Concept of Retroactive Coverage
Retroactive coverage does not exist. You can’t buy a homeowners policy and expect it to cover damages that occurred before it was purchased. That is not how insurance works. It’s important to have your policy in place long before an event occurs. Don’t buy a policy today, knowing a storm is on its way tomorrow. The odds are that the policy will have a waiting period and any damage that occurs won’t be covered.
No Coverage for Bailee
A bailee is basically a third party like a moving company or an airline. Your insurance policy will not cover your belongings if they are with a bailee. When your items are in the process of being moved to the possession of the bailee, they will be covered. However, the bailee’s insurance should pick up the cost of any damages that may occur while the items are in their hands. You have the option of choosing additional coverage, however.
Loss of Use Option Not Known to Homeowners
Many homeowners do not realize that loss of use coverage is included in their policy. Loss of use covers alternative living arrangements expenses if you cannot live in your home due to damage that is the result of a covered peril. Loss of use will cover the cost of food and laundry if you have the right type of coverage. Review your policy to find out just what you are entitled to when it comes to loss of use.
Added Coverage for Earthquake and Flood Needed
Most basic homeowners policies will not cover flood, hurricane, or earthquake coverage. Since these perils are not an issue for every homeowner, they require a special endorsement. These perils occur in specific areas that are pre-determined to be at a much higher risk. Unless you live in an area that is rated for each type of risk, you won’t need the extra insurance coverage.
Deductibles Paid Out-of-Pocket for Each Claim
The deductible is the pre-decided amount that you pay for each insurance claim. Trying to pay the deductible any other way may be classified as fraud. As an out-of-pocket expense, your deductible is designed to be included as part of the expenses covering the damages. It is up to you how much you pay as the deductible.