Having different kinds of insurance is important. It, of course, is used to protect against what may go wrong. Without it, you may be stuck with sudden and unexpected costs that are more than you have in savings. However, not all insurance coverage is equal. In fact, some plans may not do everything you think they do. This can be extremely important when the minor details of the fine print of your contract with an insurer determine whether or not a cost is covered by that plan. With this in mind, below are some situations in which your homeowners insurance may not actually be adequate for your needs.
Home Appliances
Everyone that owns a house obtains homeowners insurance. This is very important. There is a lot that can wrong with a home that can create significant expense. While there are many things that homeowners insurance covers, one thing it will certainly not cover is the repair or replacement of home appliances. This includes things like your refrigerator, washing machine, dryer, microwave and more. In most cases, home warranty plans are needed to pay for these expenses. Keep in mind that these appliances don’t last forever. A washing machine, for example, lasts for 11 years on average.
Mold
One thing that not every homeowners insurance policy protects against is mold. Many policies exclude coverage for mold damage entirely. In other cases, there may be some coverage. However, that coverage may have a cap on it. Often, you are limited to only $10,000 in coverage for mold damage. Mold damage can be extremely extensive. If you end up with a leak in your roof, for example, mold can grow and spread without your knowledge. You may not become aware of it until thousands of dollars in damage has already been done.
Flooding
Some of the most devastating damage to homes happens as the result of flooding. An inch of flooding can do $27,000 or more in damage to a building. However, you should be aware that regular homeowners insurance rarely if ever covers the cost of flood damage. Instead, you have to purchase a separate flood insurance policy. Research whether or not you live in the floodplain of a river, tributary or other body of water prove to flooding. If you do, you should certainly purchase flood insurance. Not doing so can be disastrous in the long term.
The Movement of the Earth
In most cases, homeowners insurance does not cover damage done by the movement of the earth. This means you have to purchase separate insurance for damage done by earthquakes. If you live in close enough proximity of an active fault line, you should certainly purchase this additional coverage. Homeowners insurance will also not pay for damage done by sinkholes. The only exception is in the state of Florida where sinkholes are common enough that the state requires that homeowners insurance covers the cost of sinkhole damage. Make sure to research whether or not sinkholes could form on any land you are considering purchasing.
Especially Expensive Items
If your homeowners insurance protects against burglaries, you would assume that all your valuables that were lost would be covered. However, this is not always the case. Homeowners insurance policies may have exclusions for especially expensive valuables. This often includes jewelry as well as fine artwork. Instead, you will need to add an insurance rider that specifically names these items as covered if you want to protect them. You should also be aware that the policy may not protect cash money that is destroyed, stolen or lost. Keep your money in a bank and not under your mattress.
It’s very important to have insurance especially for your home. However, not every insurance policy covers everything that could possibly happen to your home or valuables. Make sure to read over the fine print carefully. You may be surprised at the things that aren’t actually covered.
