Friday, November 13, 2015

7 Costly Gaps in Homeowners Insurance

When it comes to insurance, most homeowners are clueless as to what their policy does and does not cover. From earthquakes to flooding, there are several disaster situations that basic homeowners insurance won't cover. Not knowing what is covered by your insurance policy could cost you a lot of money. Your Lake of the Ozarks insurance company is here to let you know about several areas where you might need additional coverage.

1. Fire Damage  

Many people think that if their house is consumed by fire, the insurance company will cover all the costs to rebuild. Your company will normally pay replacement cost of the structure only up to the limit of insurance.  There are also limits to the amount of debris removal charges allowed.  Keep in mind the company will only pay replacement cost if you replace or rebuild.

2. Earthquake Damage 

Damage to your home caused by an earthquake is almost never covered under your basic homeowners insurance policy. You would need to purchase a separate earthquake policy. Most people believe that these natural disasters are covered in their policies, when really they're not.

3. Frozen Pipe Break

If your pipes freeze and break during the winter, your insurance might not pay for it. You have to take certain steps to protect your home or you might be liable for the costs. In this case, if you fail to keep your home heated or keep the pipes drained, especially while you're away, the damage that results from freezing might not be covered.

4. Sewer Backup

If your sump-pump backs up and floods your home, the damage is typically not covered by your homeowners insurance. In this case, you as the homeowner would be responsible to pay for those costly repairs, unless you specifically added coverage for water and sewer backup.  This is a minor cost for a great additional coverage.  You should make sure this is on your policy.

5. High-Value Belongings 

While all homeowners policies cover your personal belongings up to a limit, certain items may not be included. Valuables such as jewelry, silverware and collectibles, like stamps and coins, are typically only covered up to around $1,000-$2,500. Most policies cover stolen items, however they don't always cover if your possessions mysteriously disappear. The best way to handle these specialty items are to specifically schedule them which may require an appraisal.  There may also be an opportunity to write the coverage as an Agreed Value verses Actual Cash Value.  Your agent should be able to discuss your options with you.

6. Building Code Upgrades

The majority of homeowners think that if building codes change, your insurance policy will cover the cost of the upgrades to get it back up to code. Unfortunately, most policies do not pay for upgrades, even when they are mandated by new laws. You would need to take out additional "ordinance or law" coverage.

7. Home Office 

Most homeowners policies will limit coverage for business equipment in a home office to $2,500. The policy also offers no liability coverage for business use of your home. A separate business office policy may be able to provide liability and contents coverage for a couple hundred dollars a year.

These gaps could end up costing homeowners a lot of money. On the other hand, many homeowners policies provide coverage for many unexpected things such as electronic data like music and damage to appliance caused by power surge. The bottom line is that it's important to know what your Lake of the Ozarks homeowners insurance policy does and does not cover. Give Insure the Lake a call today to see how we can help with all of your insurance needs!

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About the Author: Steve is a double back-flip insurance ninja. He was named Young Insurance Agent of the Year by the Missouri Association of Insurance Agents in 2010 and is a Certified Insurance Counselor. When he is not helping customers, he enjoys community service, Latin dancing with his beautiful wife and going on adventures with his two awesome sons.

Steve Naught, CIC
3736 Osage Beach Parkway
Osage Beach, MO 65065
Next to Golden Coral