Homeowners policies are all different, depending on your carrier. Most people assume that if they have a “standard” homeowners policy, they are covered for everything. That is simply not the case.
Many things that you think would be covered are actually optional coverages that your agent must add manually. If you have an inexperienced agent, when you go to file a claim, you could be on your own. You are effectively self-insured.
Here are some optional coverages that you want to consider adding to your homeowners policy before you get caught holding the bill.
1. Sewer and Drain Coverage – One of the messiest disasters you could have happen in your home is to have a water backup caused by the sewer or drainage system. The damage is often in the thousands and coverage is not usually included in a standard homeowners policy. The Civil Engineering Research Foundation states that sewer backups are increasing at an alarming rate of 3 percent annually. A sewer and drain endorsement is inexpensive and can be added to your policy to protect you from these disasters. When the time comes, it is a worthwhile investment.
2. Limited Matching Coverage – Most people assume that if you have a covered claim, the repairs will make your home look exactly how it did before the damage was done. However, for many homeowners policies, this may not apply to roof shingles or vinyl/aluminum siding. When repairing a covered claim, the insurance company has no obligation to make sure the repaired portion of your home matches the rest. With a matching coverage endorsement, if your shingles or siding is out of production at the time of the repairs, the insurance company will also replace the undamaged portion to match. This protects the curb appeal and resale value of your home.
3. Building Ordinance Coverage – We know that if a covered loss should occur, your insurance company will rebuild your home to the way it was before the loss. But what if your home was not up to current building codes before the loss? You could be stuck paying the difference to bring your home up to code if you do not have a building ordinance endorsement. This additional coverage will usually give you an additional percentage of your Dwelling Coverage A in order to bring your home up to code. If you live in an older home, this coverage could save you a lot of money in the event of a claim.
4. Flood Insurance – Most people think that if you are not in a flood zone, you don’t need flood insurance. However, 20 percent of all flood insurance claims are in low to moderate risk areas where you are not required to buy flood insurance. Floods can be cause by many sources including storms, overflowing bodies of water, or over-saturated ground. Unless you live on top of a hill (and even then), flood insurance is worth looking into. It is usually inexpensive and give you significantly more protection against major weather events.
5. Earthquake Coverage – Standard homeowners policies will not cover damage from any sort of earthquake or earth movement. This also includes sinking, rising, shifting, expanding or contracting of earth. We personally had a claim denied due to “shifting earth” during an extreme drought in Nashville many years ago. It resulted in thousands out of pocket to fix foundation issues in our home. In Middle Tennessee, an earthquake endorsement is inexpensive and would protect you in the event any earth movement should occur.
While there are many more optional coverages, these are my top five to make sure you at least consider when you are shopping for a homeowners policy. While they might cost you a little more today, in the long run, these coverages could save you thousands and some major headaches.
If you have any questions about optional coverages, please feel free to give us a call or email us here. We look forward to helping you!
Disclaimer: Every homeowners policy is different. Please consult your specific homeowners policy for specific coverages, exclusions, and limitations.