Many homeowners mistakenly believe that when they purchase insurance for their home, everything is covered. However, this isn’t the case. Though different insurance plans vary by plan or company, most companies typically don’t offer insurance for the following five things.
Heavy rain and other extreme weather can cause a home to quickly fill with water, leading to damage to the walls, flooring, furniture, and structure. Flood insurance typically has to be purchased in addition to homeowners insurance. San Diego homeowners should be aware that this insurance has to be bought through the National Flood Insurance Program. Many people who don’t live in coastal areas or flood zones believe this type of insurance doesn’t apply to their situation. However, the Federal Emergency Management Agency (FEMA) estimates that 20 percent of floods occur in moderate to low-risk flood areas.
2. Business Equipment and Structures
For those running businesses out of their homes, it’s important to know that most standard policies don’t cover valuable business assets, including proprietary client lists, business equipment, and separate structures that aren’t specifically listed on the policy. A rider can be added to a current policy, or a separate business insurance plan can be purchased to cover theft and loss of business-related items.
3. Water Backup and/or Sump Pump Overflow
When a large amount of rain falls in a short period, the ground can’t immediately absorb all of the water. The excess water collects underground and below basement floors. A sump pump is designed to remove this subsurface water before it floods the basement and causes water damage and mold. Though it isn’t standard in plans, many companies do offer additional coverage to protect against water backup problems.
4. Cash, Valuables, and Collectibles
Most insurance policies cover valuables and collectibles up to a $1,000 value and cash up to $200. Families who have cash, valuables, and collectibles in their home in excess of these amounts don’t have adequate coverage. Highly valuable items, such as silver, coins, heirlooms, firearms, fine art, and jewelry may exceed this coverage. “Valuable personal property” insurance may be purchased or added to an existing policy plan to cover valuables. Putting fine jewelry, cash, and coins in a fireproof safe offers additional protection.
5. Foundation Cracks Due to Settling
With time, the earth shifts and houses “settle,” which can cause cracks in the foundation. These cracks can eventually lead to cracks in the walls and structural damage. Getting an inspection prior to buying a home is essential so you can look for foundation cracks. Most insurance policies exclude damage to the home from cracking, bulging, settling, or shrinking in the walls or foundation, and they don’t have an add-on or rider coverage for foundation cracks or settling either, so avoiding these types of homes is essential.
If you own a home or are considering buying one, take the time to understand exactly what your homeowners insurance policy does—and doesn’t—cover. It could save you a lot of time and heartache. The friendly professionals at Altra Insurance Services will be happy to help you examine your current policy and determine if you have the coverage you need. We can also help you with renters insurance, commercial insurance, and motorcycle and auto insurance. San Diego residents should call one of our friendly agents today at (800) 719-9972.