Homeowners may not always be fully aware of what their homeowners policy covers and, more importantly, what it doesn’t cover. There may be additional coverage available and/or additional policies that may better protect their property—and ultimately their wallet.
While this list is not all inclusive, here are some areas to research and discuss with insurance professionals:
- Most policies do not include flood coverage and flooding occurs outside of flood zones. A heavy rain can cause flooding regardless of where the home is located and regardless whether the area has ever flooded before. Renters especially may be unaware that their policies do not cover flooding, as outlined in “This One Common Insurance Mistake Could Cost You Thousands, Experts Warn”.
- Earthquake damage: We usually think of California when we think of earthquakes. However, a large portion of the U.S. has experienced damaging earthquake shaking over the last 10,000 years. While that is a long, long time, the conclusion, according to the U.S. Geological Survey, is that “damaging shaking is possible in all fifty states.”
- Claims may require an inventory of possessions. The best time to create that inventory is before a loss. There are apps to help create an inventory, or a simple spreadsheet that lists belongings and their value can be created, or a video record can be made. TIP: These records are best kept in a safe place away from the home.
- High-value items and collections such as jewelry, wine, musical instruments, baseball cards, coins, rare books, and others may need a rider or separate coverage.
- The purpose of replacement cost coverage is for the homeowner to be able to rebuild the home that they currently have. The replacement cost calculation needs to be based on the quality and features of the home. What home details/data were used to determine the replacement cost and do they match the actual residence? Have the homeowners upgraded their home since the last review? Does the policy include the cost for code upgrades? Is there gap insurance available in case costs escalate suddenly?
- Loss of Use/Additional Living Expenses: These are payments for temporary housing and expenses while the home is being repaired or rebuilt. Homeowners may not realize that it might take a while for the claim to be settled and rebuilding to be completed. Are these expenses covered and is the length of time satisfactory to everyone?
- Is personal property for replacement value or actual cash value? Is theft of personal property outside the home covered, for example, a laptop taken while they are traveling.
Homeowners can receive a free property risk assessment at https://www.freehomerisk.com/. In easy-to-understand terms, the report ranks various risks on an A to F scale.
Whether discovered after a single loss or a major disaster, underinsurance is an issue for all involved parties. Accurate replacement costs and insuring to value helps property owners rebuild what they’d previously had, receive sufficient contents coverage, provide the proper value for flood insurance and—most of all—prevent an unhappy client. e2Value keeps up with changes in costs to provide you with fast, cost-effective and accurate replacement cost valuations. Contact us about estimator tools for Mainstreet® homes, high-value homes, mobile manufactured and kit homes, condos and co-ops, commercial and farm & ranch structures.