Home » 5 Things Your Homeowners Policy Does NOT Cover
Your home is important to you, especially in these times when we all are leaving our houses much less. It’s a great time to review your homeowner's policy with an agent to ensure you are properly covered in the case of loss. It’s better to be proactive than assume because there are some things your homeowner's policy likely does not cover and the list may surprise you.
A common misconception about flood coverage in a homeowners policy is that it covers weather-related floods. In reality, the flood insurance that you’ll find in home insurance is intended for sudden water loss such as a water pipe breaking or a leaking toilet. Sometimes, with proper endorsement coverage, homeowners can also be protected from water back up in sewers, drains, and sump pumps. Floods from rainwater, groundwater, swimming pools or bodies of water? Not covered on your homeowner's policy. More on this topic in McConkey's blog “Homeowners vs. Flood Insurance: Is Your Property Protected?”
Home Title Theft
This scam, also called deed theft, happens when a thief steals your identity and forges your signature in order to appear as the property owner on a deed. When a home title is stolen, the thief can refinance your mortgage or open a home equity line of credit for cash and then not make the payments. Often, homeowners do not realize this has happened until a bank contacts them about missed payments. While your homeowner's policy would not cover something like this, there are title protection services to help prevent you from being a victim.
Construction or Renovation Damage
Should the contractor you hire to work on your home cause damage, your policy may not cover the cost of the loss. In this case, you’ll need to talk to your agent about acquiring a separate policy and also have them review the contractors’ liability insurance prior to any projects beginning.
Insurance carriers operate on the assumption that homeowners are taking reasonable care of their homes. That’s why your policy would not cover damage related to neglect or failure to keep the property properly maintained. You may be surprised to know that this includes rodent and insect damage, rust, mold, and regular wear and tear are not covered. This is why home inspections can be so helpful before buying a home.
If your side hustle or small business operates on your property, it doesn’t mean that damage or loss of related items would be covered under your homeowner's policy. For example, if you run a small business making pottery out of a detached garage, the structure and its contents may not be included in your insurance coverage because it is considered business property, and therefore may require a business owner's policy. Another example would be if a fire destroyed business inventory. In that case, your homeowner's policy may cover only a limited amount worth of loss.
If you’re in the habit of blindly renewing your policy every year, it’s definitely time to talk to an agent and review if you’re properly covered. You may be missing out on some very important coverage, as well as being charged too much for what coverage you do have. Contact us today to get started, email firstname.lastname@example.org!
About Valley Forge Captive Advisors
Valley Forge Captive Advisors is a commercial insurance brokerage and risk management firm specializing in member-owned group captive insurance companies in King of Prussia, PA.