Review your insurance policy to find the loopholes
December 7, 2009
Time to do some end of the year homework, a good place to start is to thoroughly review your homeowner’s insurance policy. The sudden surprise of a home disaster is the worst time to find out you lack the necessary coverage with your insurance policy. Dwelling and homeowners insurance is often required for homeowners who have properties that are financed or secured through a mortgage loan. There are a number of areas of insurance coverage that are often taken for granted by unsuspecting homeowners and could lead to items lacking sufficient or total coverage.
One good place to start is to review your coverage for items damaged by water and storms. Storm damage can often lead to flooding in your home, you would likely find that your insurance companies has very limited coverage when it comes to flooding in a property. As a general rule of thumb, your insurance company does not cover flooding that is a result of a storm or enters your home through the foundation or walls of your property. Water damage that is a result of broken pipes, sump pumps or sewage back ups tend to be covered within most insurance policies. The option to extend coverage to cover these unexpected disasters is available with almost every insurance carrier. Property owners may elect to expand their coverage to include flooding or water damage, this is typically referred to as an insurance rider to your coverage. The expanded coverage will likely raise your premium, but in many cases will be well worth the investment if an unforeseen disaster occurs to your home. If you have the unfortunate luck to live in a FEMA declared flood zone, you may be required to purchase separate insurance to cover this. Flood insurance is different than a rider of coverage on your insurance policy and is endorsed by the flood smart program. This will add another expense to your monthly housing budget, but is necessary to recover damage if your home is unexpectedly caught in a flood from severe storm or hurricane.
The evidence of water damage can also bring on another key area of water problems in your home. Mold can begin to grow in as little as forty eight hours after your home has been exposed to extreme moisture. Insurance companies have varying degrees of coverage for mold in your home, so be certain to review this coverage in your policy. A common tactic for insurance companies to try to avoid paying a claim is citing that the condition was a pre-existing condition, that occurred or appeared prior to their responsibility of coverage. This can often shift the burden of proof onto the homeowner to demonstrate that the mold was not hidden or a result of neglect by the property owner. Careful review of your insurance policy should help to provide direction as to how mold is treated with your coverage, as well as your responsibilities and guidelines to follow.
