As a consumer, as you buy an insurance policy to protect whether it is your home or automobile or even your business the hope is that if anything happens you will be covered.
The problem is, that is not the case. Every insurance policy has exclusions built-in that can leave you out to dry.
The best thing you can do as a consumer is to understand these main exclusions so you are prepared or able to purchase an additional policy to cover those “GAPs”
In this article, we are going to focus on the main exclusions built into every home insurance policy.
The first two exclusions are exclusions that are excluded from every homeowner’s policy but can be filled by purchasing another specific policy or adding a specific endorsement to the policy. (depending on what state you live in)
These are Flood & Earthquake
Homeowner’s insurance policies have never covered Flood. Flood insurance is regulated by the federal government and can either be purchased through FEMA or you can now purchase it through a private flood market.
There are stipulations involved and the pricing may vary completely between these two options so if you are looking for coverage, make sure you talk to someone that understands both.
What exactly is Flood Insurance?
Flood insurance covers the overflow of inland waters and unusual and rapid accumulation or runoff of surface water from any source that damages either two or more accent properties or two or more acres of normally dry land.
If you are in a high-risk flood zone, your mortgage company will require you to carry flood insurance. If you aren’t in a high-risk flood zone, you are not forced to have this coverage but are still eligible to purchase it.
The high-risk flood zones will pay significantly more premium than those that are not in the high-risk area.
For those of us that reside in Upstate New York, we are fortunate to not have a real concern about earthquakes but you never know.
Because New York is a lower-risk area for Earthquakes, most homeowner’s insurance company’s will offer an endorsement that you can add to your policy for an additional premium.
In most other states, to get earthquake coverage, you need to purchase a separate policy just as you would with flood insurance.
All homeowners know that your house settles after time. You will notice your doors to be just a little bit off when you shut them compared to when your house was built.
Earth movement and ground settling are also excluded on homeowner’s policies and the number one area that we see this, is your foundation.
The shifting or settling of your foundations is not covered by your insurance. If you notice large cracks, it is important to get an engineer’s opinion if it is just a little wear and tear, or if it is a bigger problem.
Mold is not guaranteed to be covered in every situation.
Where the mold came from, how long it’s been there can affect whether or not it would be a covered loss.
A case of mold that may be covered is the sudden discovery in an area where you recently had a roof leak.
An example of when it wouldn’t be covered is, you decide to remodel your kitchen and as you tear up the floor you notice mold underneath. Since this isn’t a sudden and accidental discharge of water, the insurance company would not pay for the damage.
What is your best option?
Now where these are the main homeowner’s exclusions built into the policy, that doesn’t mean everything else is covered. There are other parts to the policy that can limit or exclude coverage.
Every situation is different so it is important to understand your policy and have a trusted independent insurance agent that you can call and discuss this with. Whether before or during a potential claim
If you don’t have a relationship with an agent and want a review of your insurance then click the button below to schedule a review with one of our trusted insurance advisors.