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In recent years, writing home insurance policies has become a huge expense for insurance providers. In fact, the average payout for a claim nearly doubled between 2002 and 2011. Insurance providers responded in two ways – they increased the amount you pay for home insurance, while also scaling back what a policy covers.
This leaves most homeowners in a pickle. It is now your responsibility to make sure that you and your home are protected from these exclusions. In an effort to help you make sure that you are protected, here is a list of some of the most common places that insurance providers have scaled back coverage:
Water Damage Coverage
Home insurance policies used to cover all kinds of water-related damages. Now, though, you may be surprised at what’s not covered. In fact, most insurance providers will only provide a payout if you can prove that a leak is less than 14 days old. This means that if you had a pipe leaking behind a wall for more than 2 weeks, you could be footing the repair bill yourself!
There are a few ways that you can help avoid this situation. First, try to catch a leak as soon as it occurs. Place a water alarm in places that leaks arise – under sinks and next to washers and water heaters. Also, speak to an insurance agent about adding protection to your home insurance for drain and sewer backups. This will add a bit to your premium, but the added protection is worth the cost.
Flood Damages
You may know that flood coverage is no longer a part of your home insurance policy. In order to protect your home against flood damage, you need to make sure that you have a flood insurance policy. These are supplied through the National Flood Insurance Program.
If you live in a flood zone, this protection is highly encouraged. You don’t want to foot the bill if your home is damaged by a flood, so make sure that you have the right protection before it’s too late.
Payments for Repairs
Insurance providers used to guarantee that they would completely cover damage to your home. Nowadays, there are a lot more exclusions in the process, not to mention the red tape you’ll have to work through.
If you want to ensure that you are better protected, inquire into purchasing extended replacement coverage for your home insurance. This protection will kick in and help pay unforeseen costs in case you need them. A similar policy (replacement-cost coverage) is available for your possessions.
Rebuilding Costs
Insurance policies like home insurance are built upon repairing or replacing the home that you had. Therein lies a problem, however – if your home is destroyed, you will need to rebuild your home with current building codes in mind. This is sometimes more expensive than simply replacing your old home, and you could end up paying for those added costs.
To help offset the expenses of keeping older buildings up to code, make sure that you take out a little extra coverage. The added protection will come in handy if you ever need to replace a structure according to current standards. You can sometimes also add “Ordinance and Law” coverage to help offset these types of expenses.
Do you have any more questions about what exclusions may plague your home insurance policy? If so, call Vargas and Vargas Insurance at 877-550-0025, and ask one of our insurance experts to review your home insurance policy. We will help uncover any holes you may have, and can help you ensure that you are fully covered.
