Learning Center I am doing my best to avoid insurance jargon here!
Property Type
Policy Type
Coverage Type
What's included?
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Fire
This is actually not too common of a claim, though when fire strikes, it can often be the most devastating.
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Lightning
On average, lightning strikes earth 8.6 million times per day. Wow. Good thing it's covered in your homeowner's policy.
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Windstorm
One of the most common causes of claims. This includes hurricanes and tornados. In some states where these are more common, such as tornado alley or along the coasts, there may be modified coverage here. Be sure to check the language of your policy
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Hail
Did you know, the largest hail ever recorded measured 8 inches in diameter and weighed 1.93 pounds? This is one of the most common causes of claims.
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Theft
There were an estimated 1,579,527 burglaries in the US in 2015. Theft is unfortunately very common.
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Riot
More common for property in inner-cities.
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Aircraft
An airplane comes crashing through your roof. Highly uncommon, yet covered.
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Falling Objects
Timber! Watch out for that tree. Note that damage to your home's interior or personal property is only covered if the falling object first caused damage to the home's exterior.
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Vehicles not owned
Just in-case a crazy teenager skids into your home! Note, damage caused by a vehicle owned or operated by any resident of your home is not covered.
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Weight of Ice, Snow, Sleet
A common cause of damage, especially in colder climate states. Note that this does not cover damage to outdoor property, such as awnings, fences, patios, pavement, and swimming pools.
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Smoke
A fire in one part of the home can wreck havoc on the rest of the home via smoke damage. Note, that this peril does not cover damage from fireplace smoke!
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Vandalism (Your Home)
For instance, if someone spray paints graffiti all over the side of your home. A heartless act. Note, if the home has been vacant for 60+ days, this is likely not covered.
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Vandalism (Your Stuff)
For instance, if someone throws some bricks through your windows and shatters your glass tables. A heartless act. Note, if the home has been vacant for 60+ days, this is likely not covered.
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Freezing of Pipes
Make sure to maintain adequate heat in the house when it's cold out. If your pipes freeze while the residence is unoccupied, you might only be covered if you made an effort to maintain heat in the house or shut off the water supply and drained the system and appliances of water.
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Volcanic Eruption
Generally covered in your Homeowners policy. The following states have active volcanoes: HI, AK, CA, WA, WY, OR. If in a high risk area, you may want to consider add-ons that can offer additional protection.
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Electrical Current
Try to avoid having too many cords plugged into the same outlet. Your homeowners policy will cover you for artificially generated electric current.
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Water from appliances (Your Home)
A hose on the washing machine comes loose and causes water damage to your hardwood floors! Good news, you will be covered for the cost to replace the floors and as well as fix that old hose.
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Water from appliances (Your Stuff)
A hose on the washing machine comes loose and causes water damage to your furniture! Good news, you will be covered here.
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Explosion
Propane tanks, aerosol cans, and other flammable household items can explode.
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Personal Liability
Let's say you are responsible for harming someone else or damaging their stuff whileon your property. If that person decides to sue you, this coverage kicks in. This coverage will also provide a legal defense team for you, even when the charges brought against you are groundless. This is still bound by the Coverage E limit in your policy.
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Medical Payments to Others
If someone is injured while at your location and sues you, this will cover their medical expenses for up to three years after the accident. Of course this runs out if the medical expenses go above your Coverage F limit.
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Everything Else
Extended incident coverage provides additional coverage beyond the basic coverage areas. This means you are covered for everything you can imagine with the exception of the specific incidents listed in the “Never Covered” section and the Add-ons NOT purchased.
What Can Be Purchased As Add-ons?
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Flooding
The most important exclusion to understand. First, know your flood risk (check my free risk assessment). Second, know that over 20% of flood claims come from properties in low-to-moderate risk areas. Flooding can be devastating, and it's not a game of risk I'd typically play. It also leads to follow on damage like mold and rot. (none of which would be covered if you didn't have the flood coverage)
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Mold
Most commonly occurring in older homes in humid environments, mold included fungi, wet rot, dry rot, and bacteria. Eww! Pro tip: keep a dehumidifier or two in basement and fix any leaks found immediately. Mold can be very costly to remove.
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Replacement Costs (Your Home)
Replacement cost is the amount of money it would take to repair, replace or rebuild your home using similar materials and including labor. Regardless of the current value of your home, you will want to get an estimate on the replacement cost of your home and ensure that you have the proper coverage (at least 80% but most people recommend 100%+ of the replacement cost).
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Replacement Costs (Your Stuff)
Replacement cost is the amount of money it would take to repair, replace or rebuild your personal property. We always recommend this option. Without this, you may only receive money equivalent to the depreciated value of your 10 year old couch after a disaster strikes rather than the actual price you paid originally
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Personal Umbrella
Personal umbrella insurance provides extra liability coverage on top of your existing homeowner's insurance. Umbrellas serve to protect you in the event of a devastating liability claim or judgement. For example, if your homeowner's insurance covers you for $500,000 in damages but the claim is for $1,000,000, your umbrella policy would cover the remaining $500,000.
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Scheduled Personal Property
Are you a collector of fine arts or have you perhaps recently inherited grandma's precious stamp collection? Scheduled Personal Property provides separate protection for items such as jewelry, firearms, stamps, coins, and fine art. You will have to describe and itemize each item but this add-on will cover your personal property on an actual cash value basis.
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Sewage Back-Up/Sump Pump
Did you know power outages are one of the leading causes of overflowing sump pumps? This is a bad situation -- water damage in the basement, mold, even sparking a fire. Coverage can be purchased as an add-on, but is not included by default.
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Identity Theft
Identity theft insurance provides reimbursement to crime victims for the cost of restoring their identity and repairing credit reports. In most states, identify theft coverage is available as an optional endorsement on your homeowner's policy.
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Home Daycare
Running your very own Daddy Day Care out of your home? Despite childproofing the house, accidents can still occur and as such you should consider adding home day care coverage to your homeowner's policy.
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Earthquake
Unless you purchased an add-on for earthquakes, this coverage is excluded from the standard homeowners policy. Check your earthquake risk to see if you need this.
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Lateral Lines Coverage
Only offered by a few insurance companies, this is a cost effective way to cover losses to underground systems that service the household, such as sewer lines, plumbing, electricity, natural gas, telecommunications or internet access. Typically only a few bucks a month to add, and well worth it!
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Home Sharing
Home Sharing: think AirBnB. This is a grey area in homeowners policies, though it's best to purchase extra protection. Be sure to call your insurance company and ask if you are covered before renting out part of your home.
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Everything Else
Extended incident coverage provides additional coverage beyond the basic coverage areas. This means you are covered for everything you can imagine with the exception of the specific incidents listed in the “Never Covered” section and the Add-ons NOT purchased.
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Business
If you run a home-based business and do not have separate business insurance, you may want to consider adding additional coverage to your homeowner's policy. While your homeowner's policy may cover the cost of some equipment used for the business, it won't offer liability protection or cover lost data and other assets.
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Personal Injury
Emotional damage caused by slander, false arrest, and invasion or violation of privacy. You can add a personal injury endorsement to your homeowner's plan to provide coverage. However this is not a free pass to become a the neighborhood cyber troll.
What's Never Covered?
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Pollutants
Walter White must have had some good insurance. Pollutants can be defined as acids, alkalis, chemicals, and waste. Damage from any of these is not covered.
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War
Let's hope Kim Jong Un doesn't hit the big red button!
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Cracking
Large cracks in that slab or bricks inside or outside the home… sorry, not covered by insurance. Would reach out to the company that did the installation if the cracks are premature.
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Damage by Government
Sure hope your taxpayer dollars don't come back to bite you but the Government can seize property for things like building a new highway, though the government is generally required to pay for it. If the property is used for crimes or is abandoned for a period of time, sometimes the government can seize it without paying.
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Wear/Tear
That old dishwasher on it's last legs? that 20 year old roof starting to lose shingles? Given this is inevitable due to aging, it is not covered. Make sure to periodically check up on your old piping and crusty roof.
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Vandalism on Vacant Property
Key word here: vacant. In insurance, this is often defined as unoccupied with little to no furniture or personal property for at least 60 days in a row.
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Snow on Outdoor Property
Burr! There's a blizzard outside. Note the keyword -- Outdoor Property. Don't let that snow, sleet, or ice pile up. It can be surprisingly heavy and cause collapse, especially on older property.
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Birds, Vermins, Insects
Damage caused by birds, vermin, rodents, insects or domestic animals is not covered in your insurance policy. Bats also fall under the definition of vermin so be sure to watch out for them as well.
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Power Interruption
Power outage coverage can vary depending on the insurance provider so be sure to review your plan in detail. The scenario that caused the power outage also plays a factor. For instance, widespread power outage caused by a windstorm may be covered but an outage caused by flooding might not.
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Intentional Losses
Thinking about setting your house on fire to collect an insurance claim? Don't do it. Any losses occurred with the intent to collect insurance benefits or defraud the insurer will not be covered.
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Vacant and Freezing
Losses incurred due to damage caused by a frozen air conditioner, plumbing, and other appliances will not be covered in most cases if your home is unoccupied or vacant. A home is considered vacant when it is without tenants or contents such as furniture in the home whereas a home is considered unoccupied if it has no tenants or personal property. There are options for insuring both unoccupied and vacant homes so be sure to check with your provider if this applies to you
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Nuclear Hazard
Planning on building your dream home on Three Mile Island? Might want to reconsider as your homeowner's policy does not cover losses incurred from nuclear reactions, radiation, or radioactive material.
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Household Injury
Injury to you or regular residents, other than resident employees, is not covered. Look to your health insurance to cover these bills.
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Vehicle Damages
Look for a personal or commercial auto policy here.
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Boats and Aircraft
You need to purchase a separate policy if you operate or own a boat or plane. Your liability on a standard homeowners policy will not protect you, if say that nice day on the lake turns into a boating accident. NOTE: policies often have a whole section about watercraft and whether or not you are covered. It's safe to assume that without additional protection, you are likely swimming without a lifejacket.
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Expected or Intended Injury
No, you can't go starting bar fights and expect to be covered.
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Transmission of Disease
Always wear protection.
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Crimes
If you are committing crimes, such as molestation or child abuse, don't expect protection. Expect prison.
Special Sublimits
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Jewelry
$1500
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Furs
$1500
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Photo and Video Equipment
$1500
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Musical Instruments
$2500
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Silverware
$2500
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Golf Equipment
$2500
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Fine Arts
$2500
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Computer / Electronic Equipment
$1500
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Postage
$1500
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Stamps
$1500
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Coins
$200
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Firearms
$2500
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Bikes
$1500
How Property Is Replaced
Used Cost Replacement
The cheaper option but with less coverage. Claims payments are based on the depreciated value of belongings. This means you get back the value your stuff is worth at the time of loss.
