If you are like 95 percent of homeowners, you probably have a homeowners insurance policy. But, how much do you actually know about your coverage?
Homeowners insurance, also known as home insurance, is an insurance policy that covers private/residential property, including the building’s structure and belongings inside. This type of policy is typically a “package policy,” which means that the coverage includes not only damage to property, but also legal responsibility/ liability for any injuries and/or property damage to others caused by you or members of your family, sometimes including your household pets.
Despite being a common insurance policy, many homeowners do not fully understand all the features, exclusions, and pieces of a home insurance policy. That’s why we have created a list of commonly unknown homeowners insurance facts.
From a HO-3, to a HO-5, to a HO-6, the type of coverage you need is based on your private residence. Working with an insurance agent can help you determine the right coverage for your living situation and also ensures you are getting the proper coverage.
Although your property and belongings are covered by a standard policy, some accidents and natural disasters might leave your property unprotected. For example, most standard homeowners’ policies do not cover events, such as floods from groundwater and earthquakes. However, flood insurance can be purchased as a separate policy.
No matter how cute your pup is, he/she could be costing you hundreds in insurance premiums. Because 30% of homeowners’ liability claims come from dog bite, insurance companies will sometimes refuse to insure, or raise your premium if you own the following breeds:
If your dog’s breed is blacklisted, consider buying a separate umbrella liability policy. This would allow you to get $1 million worth of coverage for less than about $300 per year, rather than inflating your homeowners’ insurance premium.
A home inventory is a record of all your belongings so that in the event of a disaster, you have a list of all your personal belongings and how much they cost. Learn more about making a home inventory in our recent post.
When it comes to making a claim, it can be difficult to know when you should take action. However, most policies have a 14-day reporting window, so that the claim does not continue to get worse or cause additional damage. If you do not make your claim in time, you could have to pay for the claim out of pocket.
Be sure to check the length of your claim window with your insurance agent or provider.
Although your valuable possessions are insured against some disasters and theft, many people do not realize that certain items have coverage limits. For example, jewelry, watches, furs, silverware, electronics, and firearms are typically limited to $1,000 to $2,000 worth of coverage. However, additional policies are available for these items and will cover them in the event they are lost, stolen, or damages.
Insurance companies want you to maintain your home and remain up to date with regular maintenance, to reduce the risk of damage or accident. If the insurance company finds your claim resulted because of maintenance neglect, they can deny your claim.
Making claims regularly can cause your rates to skyrocket. Even after your first claim, you may see an increase in premium. Research shows individuals that make one claim are more likely to make a second or third, so insurance companies will increase your rate to compensate for any future claims you may make.
By taking the time to better understand your policy and coverage, you can make a more educated decision about your insurance.
Still not sure if you have the coverage you need? Contact one of our insurance professionals or get a free quote and consultation today.